This year, mortgage expo is no party
Pep talks were not on the agenda this weekend as beleaguered mortgage industry professionals attended an exposition in Long Beach.
After all, the keynote speaker was William Dallas, whose Ownit Mortgage Solutions Inc. was one of the first lending companies to fold last year amid a sharp downturn in the housing market.
“People ask me why I don’t get back into the mortgage business,” he told a crowd of about 200 on Saturday. “Because I’m not stupid.”
The former chief executive of Agoura Hills-based Ownit, which abruptly closed in December, encouraged attendees at the California Assn. of Mortgage Brokers’ 2007 Grand Exposition to find solutions for survival in the turbulent industry.
“As brokers and originators, we need to decide what to do,” he said. “Everybody likes a murder, everybody likes a tragedy. . . . And this is clearly a tragedy today.”
It was a theme echoed repeatedly at the expo, where strategic financing and charting a course for the future were popular catchphrases. With about 1,500 attendees and 220 exhibitors, the event capped off a three-day convention of networking opportunities and workshops with titles such as, “Shut Up, Stop Whining and Get a Life!”
For the mortgage industry, it was the end of a long week in which Countrywide Financial Corp., the nation’s largest mortgage lender, said foreclosures and delinquencies had soared and that Wall Street would no longer buy its loans or provide it with funds to lend.
On Thursday, a day after one analyst suggested that Countrywide might have to file for bankruptcy, the Calabasas-based company borrowed $11.5 billion by expending a line of credit to help fund its operations.
On Friday, the Federal Reserve cut a key interest rate and Countrywide’s stock rose $2.48, or 13%, to $21.43, reversing a significant decline.
Convention goers, which included brokers, loan officers and appraisers from around the state, were cautiously optimistic. Many expressed disbelief at news of Countrywide’s troubles, saying the housing downturn would only get worse before getting better. Others predicted relief would come soon.
“The general mood of the convention is ‘upbeat-stunned,’ ” said Peter Ogilvie, president of the California Assn. of Mortgage Brokers, on Saturday. “People are looking for positive answers, they’re looking for solutions.”
Exhibitors still found ways to keep things festive.
At the Countrywide booth, company representatives handed out tote bags and cajoled attendees to play “The A-maze-ing Broker Challenge.” The Pacman-inspired video game featured dollar signs and Countrywide logos that players collected for points. Nearby, Brea-based ResMAE Mortgage Corp. teamed up with beverage franchise Maui Wowi to whip up smoothies served in plastic coconuts.
But longtime attendees of the annual convention said this year’s expo felt different than in years past, when high-profile athletes would make appearances and exhibitors’ booths were bigger and flashier.
“Today it’s more toned down,” said Oanh Mai, a loan processor at Lancaster-based Mammoth Mortgage Corp. Mai, 40, said while past conventions were basically “big parties,” this year, it seemed to be more about business.
Attendees had different ideas of what was to come and when things would get better.
Patrick Griffith, a senior loan officer from Hermosa Beach, said he came to the expo to “see what lenders are still out there, see who’s left.”
“It’s just got to shake out,” Griffith, 48, said. “Real estate is always cyclical. Every 10, 12 years the same thing happens.”
But he said the current cycle is worse because of the “exotic loan products” that flooded the market during the housing boom, making it easy for those with low credit scores to gain approval for loans.
Griffith would like to see the Federal Reserve, which he said has acted too late already, raise the conforming loan limit and estimated it would take at least three years before the market stabilized.
“We have yet to see the worst,” he said. “It’s just starting now.”
John Phung of Irvine said he didn’t think the market would ever return to what it was just a few years ago. These days, the 40-year-old loan originator said he closes just one or two loans a month and that the Newport Beach-based mortgage brokerage where he works has cut back on promotions.
Phung said he and his wife, a mortgage broker, have been focusing on “just making ends meet.”
“This is the first time we’re experiencing hardship,” he said. “We’re trying to take it in stride and hope for the best.”
On Sunday, Dallas agreed that the mood at the convention had been subdued.
“It was almost like a going-out-of-business sale,” he said. “It was as somber as I’ve seen.”
