I was gambling in Havana, I took a little risk

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Allow me to whine a little. Actually, we shouldn’t be whining. We should be screaming. We should be screaming at these people who are so out of touch with what happened that it’s criminal. Skip a vacation? Manage a budget? Buy a clue! If I didn’t personally see LO’s lie to their clients about the loans they were receiving, if I didn’t personally see EO’s turn a blind eye, if I did not see people signing loan papers that they had no business signing, that would be one thing. But I saw it all first hand. I know how we got here. I was chirping about this in 2005. And I was right. Executives turning a blind eye to the practices in the communities in favor of profits. Or maybe they didn’t. Maybe they didn’t know enough to see where the scams were being run. The bottom line looked great and what else do we care about in this ADD society? It don’t look so great now eh boys?

The riff raff is out of the business now and that’s a good thing. I know LO’s who have had zero loans go bad in all this. ZERO. I know one guy who has had two go bad in a thirty year career. Those are well qualified borrowers who have been placed in appropriate financial vehicles, by professionals. Unfortunately, there was a lot of a different sort of business going on out there over the last five years. I personally walked away from my notary commission. In California, the notary’s job is to essentially verify that the person is the person they say they are and that they signed the document in the notary’s presence. They are not allowed to interpret the documents for the signer. Unfortunately if you’re smart enough to know what the documents are saying, and can see the numbers on the app., it doesn’t take a rocket scientist to figure out they can’t afford the loan. As a notary, there’s nothing you can do. Three years ago, no one wanted to hear that the borrowers shouldn’t be signing the loan, that they didn’t understand what they were signing. The mortgage broker wanted his commission, the bank wanted their interest, the title company didn’t want to lose the business and no one, NO ONE was looking out for the client.

The guy who bought my house and subsequently lost it in foreclosure had no business buying that house. I was ready to pull it off the market when some huckster in San Jose finally put the loan together. This jackass bought a $555k house with $500 down. And we wonder why there’s a mortgage problem? I promise you, he did not understand what he was getting into. He barely spoke English. His real estate agent and his LO took their commissions and screwed him. I don’t know how that bank could have known what the guys on the ground here did to them.

Still, borrowing money on a house is a business decision. Make a bad business decision and the shit will hit the fan. Well, the shit has hit the fan. Banks made bad business decisions and they’re feeling the pain and borrowers made bad business decisions and they’re feeling the pain. The way that the GFE’s are set up, ARMS look squirrelly on them and really reflect Fiction in Lending, not Truth in Lending.

There’s plenty of blame to go around on this one. I’m just appalled at the lack of understanding of the issue by our politicos. It’s not a matter of skipping a vacation. Personally I haven’t been on vacation in over a year. I know a lot of people who aren’t taking vacation because they want the pay out when they’re laid off. That’s why I didn’t take mine. I knew the Amateur Manager had me on his To-Do list from day one. I didn’t take a single vacation on his watch. People who were at Financial have written me and told me they had four/five weeks worth of vacation that they were saving in case they got laid off. So sorry Mr. McSame, cancelling a vacation ain’t going to cut it buddy.

12 Replies to “I was gambling in Havana, I took a little risk”

  1. And if they’re really clever, they’ll give you a 35% compensation reduction and lay you off two weeks later. That way they only have to pay you your vacation based on the new numbers.

  2. I have an unrelated question actually. I will be quitting Investors within the next week or so and need to know if it would be ok to wish testicular cancer on Jerry Hauptman in my letter of resignation. Any help you could contribute would be greatly appreciated.

  3. Now, I feel like an advice columnist. I don’t believe it is ok to wish something like that on anyone. Wishing cancer equals bad karma. It would be ok, however, to wish that his balls fell off. It would be best to wish that the legal community pierces his corporate veil and destroys him.

  4. Whenever you worked at a title company and didn’t go in knowing that your days were numbered and that beating the powers that be to the punch, with a new job, was the absolute best job protection and that making you own 401 or whatever was the smart thing to do YOU WEREN’T THINKING… From the day one managers looked to get their own guys, meaning one day you favorite and the next your out has always been our work environment. Never liked it but understood it early on and eventually saw as business.

  5. Say there ScrewedbyJerry, how about filling in PBE about the goings on there at Investors?? Since they are the last vestige of Mercury, it would be of some interest. Email is cool….

  6. Old Title Guy – there really isn’t much to report. Usually the rest of the industry knows what is going on in companies before the employees do. My guess is you’ll know what happens at Investors before we will :).

  7. Given the level of attention this blog has engendered in title company management, anonymity is a really good idea. Winedog, our fearless leader, has posted her email for here as winedog at astound dot net.
    One wonders about Investors structure, and who is running the show. A while back the word came out that Investors is no longer a part of Mercury. How? Who is calling the shots? Fatco (20% owner)? Additions, subtractions to management? If Mercury is somehow out of the picture, who is doing medical/401k/payroll? Locally? Any defections to other companies? Any word on the sale of the company out of the Alliance bankruptcy?

  8. I heard former Insurance Commissioner, John Garamendi on the raidio today. Currently,he’s California’s Lt. Governor. He is partially responsible for Mercury, the sub-prime mess, families in foreclosure and the lack of available credit in the lending industry. He investigated Title Companies and he uncovered the truth about title and loan brokers; both were cash industries living large off of closing fees. They were paid COE and took no risk when a high risk consumer took on debt they had no way to re-pay. His office did nothing (except threaten prosecution to leverage campaign donations from the title companies a la Chuck Quakenbush). He saw Mercury was taking every penny of profit and pocketing it and he did nothting. He saw all the HUD1 statements and saw the huge somes being paid through escrow and he never questioned the practice. He saw there was a direct line between a loan broakers pay check and the numbers of loans closed, and he never questioned who the broker, agent and title company really worked for as opposed to who paid for the service. The sole inference he drew from the tons of evidence he gathered was the title industry was too centralized. there wasn’t enough competition within the industry. What a joke.
    We all cashed paychecks that came from these bad loans/purchases. Not all of us were in a position to do something about it. Lt. Gov. Garamendi was. Shame on him and his contributors.

  9. Hey titleslug, how about the huge fines that FNF, Landam, ORTC and FATCO had to pay? He got them all at one point or another. Somewhere on this blog is the story of me drunkenly approaching him at a fund raiser and asking when he was going to do something about Fidelity National Title. He got them the next year. I have to disagree with you on that one, I think he did a pretty decent job.

  10. The fines that were generated were all for illegal rebates to brokers in one way or another. A way of business life in California. Want to do business? Either play the game or shut your doors. Try telling a potential customer/broker that if he comes to you, you’ll give him great service but he has to give up his bribe from the other guys. After he stops laughing, thank him for his time.
    Blaming the title industry in any meaningful way for closing rotten loans is a non-starter with me. The closing agent is neutral. With a capital N. Is the closing agent supposed to determine if it’s a good deal? We do not, and can not, chime in with our opinion on the merits of a transaction. How far can the closing agent go in interfering with the transaction before it becomes actionable? Not very damn far.
    Title companies are a big target for litigation because they are there, and have big pockets. The shady broker is long gone, and the only remaining defendants are the holder of the note and the closing agent.
    Why does nobody point out that only 35-40 percent of transactions that open ultimately close? Who is supposed to pay for all that work that you title guys did that never went anywhere? Rates too high? Donkey fazoo.
    If there is any regulator that needs a wakeup call, it isn’t the DOI, It’s the DRE. Make it a crime to solicit or accept a 12404 violation? It already is. It just isn’t enforced.

  11. It’s a way of business life in SOUTHERN California. 😉

    I never saw the sort of egregious stuff in Northern California that I saw going on daily in Southern California. FATCOLA was shut down for a week in 1998 or 1999 for their shenanigans. I think they’re the only one who received that punishment.

    If we see the fraud, isn’t it our duty to refuse to close the transaction? We can’t necessarily stop it in the escrow function, but we can always stop it on the title side. The problem was there were 10 companies right behind us willing to close it, so everyone looked the other way rather than firing and reporting the client.

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