I'm jobless!

Well - isn't this a fine how-do-you-do!  In 24 years in mortgage lending, I have never been out of a job.  What's scary is what happened to us could happen to any bank, credit union or mortgage broker without notice.

Last Thursday afternoon, April 22nd, we were notified that our warehouse line was pulled and we no longer had the ability to funds loans.  This basically means, we can't do mortgages.

My employer made a decision to exit the mortgage business.  This left me in a very precarious perdicament as I had 4 loans scheduled to close the week of April 26th.
I had to place these loans with other lenders, and tell the 4 borrowers who thought they were buying their homes this week they wouldn't be closing.  I was able to arrange to close the WHEDA loan on time as scheduled, but had to delay the other 3.  I also had to find homes for the numerous May and June closings I have in my pipeline.

In this "recovering" economy (It's not recovered yet - believe me!) everyone is at risk.  Banks, Credit Unions and Mortgage Bankers and Brokers don't have millions of dollars sitting in their vaults waiting to close loans, they have warehouse lines.  These lines of credit can be from the Federal Reserve, or other lending institutions.  They fund the loans from these warehouse lines, then when the loans are delivered to secondary market (Fannie Mae, Ginnie Mae, Freddie Mac) they are reimbursed the loan amounts and can then loan to the next borrower. 

What's happening throughout the US that's causing the situation at my employer?   Wth all the foreclosures and bad loans, the regulators are requiring more assets be placed in loan-loss reserve accounts to cover projected loan losses.  Lenders transfer the required assets to the reserve account.  That takes funds away from their net worth, as this loan loss reserve acccount can not be included in an institution's net worth.  This drops their "rating" down maybe to a C or D and makes them ineligible for their line of credit.  No warehouse line, not much money available to fund loans and you're out of business. 

I was talking to a stock-broker friend of mine who said you don't hear about it, but it's happening all over the US.  The FDIC is coming in right before 5:00 in the afternoon with their suits and brief cases, informing everyone that the doors are closed and here's the new owner that's taking over your bank.  Scary isn't it.

I'm weighing my options.  I'd like to work somewhere I can apply my vast knowledge to turn around a mortgage department and make them one of the top lenders of choice.  I've got a few in mind - I'll keep you posted.