How to Get Rich in a Volatile Mortgage Market
Posted by Bill Rice on 09/18/07 in Uncategorized
Blown Mortgage highlights a potentially impending trend of companies cutting their non-core entries into the mortgage business:
If you think of all of the companies like E-Trade, AIG, H&R Block that got in to mortgage as an adjunct to their core business models there is still a decent list left of those that will probably make the move out of the sector to preserve liquidity and earnings in other, more profitable business units.
How does this create a get rich strategy? Well, in the last down cycle it was arguably the catalyst opportunity that made Dan Gilbert a billionaire. After being battered on Wall Street for having a highly volatile, non-core mortgage business embedded in a technology company, during a down trend in the mortgage market Gilbert got to buy back his company at a deep discount.
The rest is Quicken Loans magic!
Tags: quicken loans, mortgage market, investment opportunities, mortgage implosion, dan gilbert, Intuit, Quicken
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Bryant Keefe | Sep 18, 2007 | Reply
It seems like this would be an optimal time to launch a Mortgage Company offering wholesale lending in the Alt-A and Subprime space. With all the companies closed there is a ton of business and money to be made. I have to wonder how much longer it will be till the investors green light new investments? We can see the writing on the wall that most banks will end wholesale loans and focus on retail.
Bill Rice | Sep 18, 2007 | Reply
I think you are absolutely right. Seems most of these lay-offs (i.e., E-Trade, IndyMac, Washington Mutual) are all wholesale for retail personnel swaps, not significant downsizing.