What is the next big thing?

In any business we are often forced to ask ourselves, what is the next big thing? I have spent many years in the financial services arena. And from the very beginning of my career, that very question has always been in the forefront.

When I started we made small loans $300 - $1,500 and we asked, "What’s the next big thing?" Then we raised the loan limits... at one point we were actually loaning people up to $10,000 on an unsecured basis... and we asked, 'what's the next big thing?"

Eventually we began to make Real Estate secured loans and we still asked, "what's the next big thing?" Well Loan Brokers became the rage and 'sub-prime mortgages came into vogue... Soon investors developed an appetite for the so-called sub-prime loan and then big banks got into the fray. And still we asked, "What’s the next big thing?"


Then came the implosion of the Sub-Prime market and then the total Real Estate bubble burst... Today the Loan Servicers are now in the forefront, they are dealing with massive delinquencies, loss-mitigation, foreclosures and shadow inventory. And guess what the question is that they are asking? You got it, "What is the next big thing?"

While attending the Mortgage Servicing Conference in Dallas Texas the week of 4/5/2011 the answer included shadow inventories, outsourcing and a new phrase was coined, "strategic default"... that is when the house across the street from you has lost so much value that letting your house go back to the bank is a strategic way of thinking.

So what IS the next big thing? During the conference it was proclaimed that mortgage defaults are no longer delinquency problems but they are marketing problems... there are not enough skilled sales people on the servicing teams that can sell customers on the virtues of loan modifications and the like... Guess what, the servicers will look for more skilled sales people, like the old lending type Account Executives...

What’s the next big thing you ask? It appears we have come full circle. I doubt that we will ever see the undisciplined (and unregulated) days of the past. But I do expect that the mortgage lending business is bouncing back...

 

And when it has completed its cycle, I have but one question... what is the next big thing?