Bank Lawyer's Blog

More On The IndyMac Business Judgment Ruling

A recent client alert from Fulbright & Jaworski raises some additional concerns about last month's decision (discussed in a December 14, 2011 blog post) by a federal district court judge in California that the "Business Judgment Rule" doesn't extend its protections to officers of California corporations, as it does to directors. F&J attorneys Andrew Demetriou and Michael Clark wonder why California law was applied by the judge.

A curious feature of the case is that IndyMac was a Delaware corporation and yet there were no arguments made by either side, or any consideration given by Judge Wright, as to why California corporate law, as opposed to Delaware law, should govern the case. Delaware law provides officers as well as directors with the benefit of the business judgment rule and would have compelled a different result.  While California's "pseudo foreign corporation statute" (Corporations Code § 2115) would displace Delaware law in favor of California law where Corporations Code § 309 is implicated, Corporations Code § 2115 should not apply in this case, as IndyMac was a publicly traded company and thus exempt from that law.

I suspect that issue may be raised on appeal.

Demetriou and Clark also observe that this decision is likely to  concern officers of California corporations and of foreign corporations that have a presence in the state because "[w]ithout the availability of the business judgment rule as a bedrock defense, corporate officers now will face potential liability for good faith business decisions based on a finding of negligence, which will be evaluated under standards that have yet to evolve in case law." As K&L Gates attorney Ronald Stevens warned, this decision, if not overturned, may very well shrink the pool of potential bank officers and directors. It's getting so the only (slightly) more dangerous occupation than bank officer or director is the clearing of land mines using either the "psychic energy" or "touch-and-feel" methods.

This is one more reason to leave California and move to more hospitable climes. Texas, for instance. Yes, I realize that Rick Perry isn't exactly a giant step up from Jerry Brown, but he's certainly not a giant step down, either. And sure, we've got Austin, but we don't have Berkeley. Moreover, Texas has (A) no personal income tax, (B) plenty of Shiner Bock, and (C) a "bidness"-friendly climate. When Matthew McConaughey is out of state making movies, this isn't a half-bad place to live or to bank.

Not Technically Illegal, But Still Illegal

A recent interview that Richard Cordray gave to an Associated Press reporter shed some light on how elastic will be the envelope of illegality that Recess Richard intends to push. Among my favorite questions and answers of the batch was the following:

Q: Are there practices that are technically legal yet require regulatory action?

A: If something is technically legal, that's one issue. But we also have the authority to determine that practices are unfair, deceptive and abusive. That's where our authority can be used to try to protect consumers, even though maybe the technicalities of pre-existing laws have been followed.

So that's something we're going to have to be careful about — the use of that authority. But it certainly is necessary to protect consumers and frankly there's a lot of fraud that's committed in the marketplace that is not on its face necessarily technically illegal. But when you see how a product is marketed, you can see what the effect is on consumers.

Since when is "the commission of fraud in the marketplace" not "technically illegal"? This is the former Attorney General of the State of Ohio, and he's arguing that it's not technically illegal?

I think that what that he intended to convey is that what has heretofore not been "fraud" will nevertheless be susceptible to being held to be "illegal" because the practice is either "unfair" or "abusive," as determined by the CFPB. The Dodd-Frank Act gives the CFPB that right. Thyat's a wonderful prospect we've all been anticipating since the act was passed.

When asked, point-blank, what are the limits on the power of the CFPB, Cordray's answer doesn't discuss limits.

A: We have three different sets of authority that Congress gave us and that we are by law responsible to carry out. We have rule making authority. And we particularly are going to be active in trying to correct some of the problems in the mortgage markets over the next year or two.

We have supervision and examination authority, which is new but very important. It's the ability to actually go into these institutions, look at their books and records and ask questions about what they do, and really get to the bottom of things. This means both working with them where that's possible and or bringing enforcement actions where that's necessary.

And the third is the ability to actually enforce the law — which is clearly needed if you're going to have a marketplace that actually works.

Do you see any acknowledgement in that answer that the CFPB's powers are limited? Does the US Constitution jump into his mind as a possible limit? "Limits? We don't recognize no stinkin' limits!"

I assume by now that followers of the CFPB understand the influence of behavioral economic theory on the creation of the CFPB. I won't get down in the weeds, but if you want to do so, start with this Minnesota Law Review article by NYU Law Professor Oren Bar-ill, who, in a footnote, thanks Elizabeth Warren for he "helpful comments." People like Liz Warren, Raj Date, and Richard Cordray think that the average consumer is incapable of making a rational decision on a product like a payday loan due to the influence of irrational factors like unjustified optimism ("I'll be able to pay that loan back in two weeks."). It's up to the regulators, who apparently are more perceptive that the average dolt consumer, to make sure that the marketplace is circumscribed in ways that restrict the ability of providers of consumer loans to exploit the consumers' irrational perceptions. You see, unlike the rest of us, the regulators are not driven by irrational, unconscious, perceptions of their own, and, moreover, can anticipate that their "nudging" of the consumer won't create unanticipated detrimental consequences for the consumer, the lender, and/or the economy. Father always knows best, doesn't he?

Ronald Mann, Columbia University Professor of Law, points out the gopher holes that the well-intentioned Liz Warrens of the world can end up stepping in.

The lure of economic analysis is that it simplifies what is multifaceted and offers a straight and general answer to what seems unmanageable in its florid heterogeneity. The purpose of this brief sketch is to suggest that the problem here is not occasional anecdotal departures from a regularity of excessive optimism. The problem here is that the general truth is in fact not simple and perhaps not even excessively optimistic. Until we know more about how and why consumers decide to borrow in this market, we cannot sensibly intervene to stop them from doing so.

And yet, here we are, intervening like there's no tomorrow.

Be afraid, people, be very afraid.

Big Bad BofA Muzzling Mortgagors?

CBS Interactive's Alain Sherter took off Friday on a bombing mission over the land that America loves to blast--Bank of America Territory--and dropped a cluster of verbal whoop-a** on the countryside.

As a condition for offering mortgage relief to Arizona homeowners, Bank of America (BAC) is allegedly requiring them to refrain from criticizing the company, according to Bloomberg BusinessWeek. That includes making borrowers delete any negative comments they may have made about the banking giant online.

Alain cites reports first published Thursday that the Arizona Attorney General is asking a judge to tell borrowers who have signed non-disparagement provisions contained in loan modification agreements that they don't have to comply with such provisions. The AG claims that such restrictions are impeding the AG's investigation into potential wrongdoing by BofA in connection with its servicing practices, including potential violations of a 2009 settlement agreement over charges that Countrywide (purchased by Bank of America) defrauded borrowers.

If these allegations are true, B of A's intent is clear: It wants to muzzle borrowers, especially those who are unaware that no court in the land would respect what amounts to a legally unenforceable -- and outrageous -- gag order.

I haven't researched the legal issues in a residential loan context, so I don't have Sherter's confidence that the confidentiality and non-disparagement provisions are prima facie unenforceable, nor, to me. "outrageous." In my personal experience, they're not uncommon in commercial loan modifications, especially in cases where the allegations by the borrower have been "intemperate" and/or the negotiations "contentious." A representative of the Arizona AG's office obviously thinks they present a legal problem for the borrowers, because she alleges that "[t]he settlement agreement purposefully makes it impossible, legally and practically, for a consumer signing it to come forward, voluntarily and promptly, to provide evidence in this case." If the agreements are obviously unenforceable, how can they make it "legally impossible" for a borrower to speak?

In this situation, the provisions are allegedly impeding a state attorney general's investigation. Therefore, there may be valid public policy arguments that the provisions should be held to be unenforceable. We'll see what the judge rules. That said, I don't think that BofA intended them specifically to hinder the Arizona AG's investigation. According to the Bloomberg article cited above, other banks are using them.

Wells Fargo & Co., the biggest U.S. bank by market value and the largest mortgage lender, has a similar practice, said James Hines, a spokesman for the San Francisco-based bank.

“Each case is unique and for a variety of reasons we may elect to include a confidentiality and/or a non-disparagement agreement as part of the settlement,” Hines said in an e-mail. He said he didn’t know how many settlements had been reached.

To me, this is one more ham-handed practice by a bank that has proved that it's tone deaf when it comes to playing a sweet public relations refrain. You have to wonder about a couple of things: first, is anyone home at BofA headquarters who can consider the reputational risk of such provisions in settlement agreements with consumers in the current climate in this country? Second, is the crowd that consistently screams that we need to "break up the too-big-to-fail banks" wasting its collective breath? Those banks seem to be doing an excellent job of destroying their own reputations without any outside assistance.

One final thought: how long before the CFPB finds confidentiality and non-disparagement provisions in loan modification agreements to be "unfair or abusive"?

Another Assembly

When President Obama announced Tuesday night that he was forming a task force to crack down on "mortgage fraud," what he and many of his like-minded supporters had in mind are the robo-signing, document-falsifying, parrot-stealing large lenders and the keystone cops who work for them. Yet, the traditional understanding of "mortgage fraud" has a different emphasis, one we've been talking about since long before this crisis was a crisis. It's typified by this sorry sad sack.

A former Hells Angels leader from Rohnert Park has been sentenced to nearly six years in federal prison for his part in a home loan fraud scheme.

Raymond Foakes, 48, former president of the motorcycle club's Sonoma chapter, pleaded guilty to fraud and money-laundering charges in October. He was among seven defendants charged in September with conspiring to defraud banks by falsifying loan applications for real estate in San Francisco and several North Bay communities.

Prosecutors said Foakes admitted making false statements on mortgage loan applications in 2006 and early 2007, in one instance falsely describing himself as the owner of a concrete company who made $24,000 a month. He claimed he intended to live in one of the properties but instead allowed it to be used for marijuana growing, prosecutors said.

That's good, old American criminal behavior, the kind that the FBI's website on mortgage fraud focuses on. The kind that hoses the bank, not the borrower. The kind that leaves not a wet eye in the house, because the average American won't shed any salt water over a bank being bamboozled.

Nevertheless, for the "fair and balanced," it's important to realize that when it comes to "mortgage fraud," banks are often the target, not the shooter. I'm confident that the new "task force" will take an all-encompassing, even-handed approach to "mortgage fraud" and will crack down on every bad actor who needs a whipping, even if that bad actor happens not to be a bank.

Of course, I was also confident that when the Broncos last played the Patriots, we'd all be Tebowing until the second coming. Instead, Denver supporters took a knee not in praise, but in pain. Thus, regarding the task force, I could be wrong.

Story-Telling Time

Hey! You!

No, not you Lizzie, we all know YOUR story.

I'm talking to you, Mr. and Ms. Average America. Richard Cordray "Wants To Hear Your Story."

So, Rich: What happened to "Rebeka From North Carolina"? Did you render her mortgage loan servicer incapable of reproduction? Was Rebeka redeemed? Is this a serial and, if so, when do we get the next installment?

The CFPB loves social media and obviously wants to reach out and touch, not just someone, but everyone. Cordray says that he wants to hear your story "good or bad." So, I intend to visit the CFPB's site and tell my story:

"The other day I pulled up to the drive-in branch of JPMorgan Chase, made a deposit, and was not hosed by the bank."

Sure, it's a dull story, but at least I wasn't "condemned to bewildering failure." Besides, as the poet Charles Bukowski observed, "To do a dull thing with style-now that's what I call art." Me, too, Chuck.

At any rate, I think bankers and their satisfied customers (I'm sure you can scrounge up a few) need to pepper the hotline with good stories of George Bailey-like bankers and the consumers who love them. After all, since the only story related by Recess Richie in his video was one where a lender was screwing a consumer, I'm sure he's hungry to hear the other side of the narrative. Don't you?

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I'm taking a brief vacation and won't be boring you until later in the week. Try to stay out of trouble until I can re-assume that burden for you.

The CFPB's Point Men

The news today that Recess Richie Cordray wants to hook up with the nation's mayors to sniff out those dreaded "predatory lenders" has every community bank that has been considering looking at residential lending as a possible source of revenue, now that CRE is on the regulators' "toxic waste" list, reconsidering its appetite for home loans. After all, the prospect of the true believers at "The Bureau" blowing kisses to the likes of Rahm Emmanuel as they trip hand-in-hand down the Yellow Brick Road to kick to the curb whatever home lenders they can label with the moniker "Predator" is enough to take the bloom off the residential lending rose.

For some reason, J. Edgar Cordray thinks that the nation's mayors have their noses to the ground, instead of where they're usually found, either up in the air, sniffing for whichever way the political winds are blowing, or firmly planted in the embarrassing regions of whomever, at any given moment, a mayor thinks can do him or her a political favor. Like truffle-snuffing hogs, Cordray thinks mayors can root out predators where others see merely benign home lenders.

"You know better than anyone who the predatory lenders are in your communities and we want to work with you to identify them," Cordray said at the Conference of Mayors in Washington.

Is The Right Reverend Richard saying that "It takes one to know one"? That might be a logical interpretation, albeit one that might end up causing "The Director" to be measured for a pair of cement shoes if he dares to refer in this way to "Ranting Rahm" or to the mayor of any small rural town where they used to handle racial unrest with a stiff rope and a high tree branch. Or is he dropping a hint that the CFPB is going to establish a call-in "hot line" for mayoral tipsters to phone in their accusations of who's preying upon the citizenry of their fair cities by offering them credit that is on terms the converse of those offered to "Friends of Angelo"? That would be a nice touch, especially if cash rewards are offered for "the capture, dead or alive" of the predators.

In a nod to fairness, King Richard admits that on occasion, a victim has no one to blame but himself or herself (or "itself," for lenders to animals-who-have-rights).

"Sometimes the responsibility for a spiraling debt resides with an individual," Cordray said in prepared statement. "Sometimes it rests with financial service providers that ensnare their customers in complex products they don’t understand."

Guess the proportion of "sometimes" to which the CFPB will find the former situation to apply as opposed to the "sometimes" in which the financial service provider is an evildoer? Odds, anyone?

Not Too Much Of A Good Thing, But Too Little

For some time now, we've been concerned that many young people are being snookered into forking out six figures in fees to law schools, only to find that when they graduate with a law degree and pass the bar exam, there's no room at the inn. There are simply too many baby lawyers being pushed out of the law school birthing room and not enough milk and honey in the promised land to feed them, much less pay off the exorbitant debt load they've incurred to obtain their ticket to paradise. A "law school shell game" was one description of the problem.

Law school professor John McGinnis and big-firm lawyer Russell Mangas have an entirely different view of the matter. In an opinion piece in today's The Wall Street Journal, McGinis and Mangas posit that the problem is not too many lawyers but too few.

The high cost of graduate legal education limits the supply of lawyers and leads to higher legal fees. And higher fees place legal services out of the reach of middle-income families at a time when increasing complexity demands more access to these services. In short, the current system leaves citizens underserved and young lawyers indebted.

Their solution to this "shortage" is to provide an expedited undergraduate path to a law license, perhaps a two year course on "legal stuff," in between hooking up and binging on brewskis. That way, we could grind out even more lawyers than we have been, thereby insuring more competition and lower legal fees for all.

They don't mention that more lawyers means more politicians of the type who are distracted by the sound of a passing ambulance(ala John Edwards). It also means more lawyers advertising themselves on television as "The Hammer" or "The Barracuda" who will take a bite out someone else's wallet and make their clients get what they "deserve." Who wouldn't want to see more of that action?

Many of the commenters to the opinion piece are fairly brutal, if sometimes amusingly so. One points to data crunched by The New York Times that shows the surplus of lawyers during the period 2010-2015 on a state-by-state basis. Facts fly in the face of a contention that we have a "shortage" of lawyers. Other commenters scoff at the notion that more lawyers will lower fees, based on the fact that grinding more lawyers out of law schools hasn't done a flying fig to lower rates thus far.

Naturally, the article also brings out of the woodwork a bevy of lawyer haters, like quail flushed from a thicket. Among the more smile-worthy of their rants is this one:

If we want to reduce the number of lawyers, simply forbid them from running for any public office. That solves several problems at once.

All-in-all, the basis on which the proposal rests simply doesn't appear to pass the smell test.

In This Foreclosure Fracas, There Are No Winners

In 2009, the state of Nevada passed a law that requires lenders to go through mediation with delinquent borrowers before they can foreclose. As often occurs with such well-intentioned but half-baked pieces of sausage, the law left a number of questions unanswered. It's taken two Nevada Supreme Court decisions to put some meat on the legislative bones. In the most recent decision, the Supreme Court found that HSBC Bank had not negotiated in good faith with the borrower to modify his loan.

The spin put on the results of that decision by the Las Vegas Review-Journal labels the appellate court's ruling "hollow" because when the case was sent back to the trial court, the judge only sanctioned HSBC $2500 plus the costs of the mediation proceeding. The borrower's attorney thinks that's highly unusual, that the penalty should have been much higher, and that -- most important to a lawyer -- the court should have forced HSBC to pay the borrower's attorneys fees. According to the story, the borrower, who lost his job a few years ago and now works as a part-time pastor, still owes his lawyer half of the $6,000 in legal fees incurred through the appeal.

[As a side note, $6,000 in legal fees for that kind of representation is a bargain, in my humble opinion. You couldn't get a major law firm to do more than look at the complaint and yawn for that fee.]

There are a few more additional twists and turns in this story. First, the lender told the borrower that in order to qualify for the loan modification program, he needed to be delinquent, and that is why the borrower claims he stopped making his loan payments. While that sounds dysfunctional, that's because that's how these programs have been set up. No one gets a break unless they're a dead beat. Moreover, as a result of the litigation, the borrower and his family have lived rent free for the last three years. A sweet deal, until you consider that he's wrecked his credit for awhile, he's out $6 grand in legal fees, and, worse, he still owes the lender the loan, which, with late fees and penalties, has ballooned from $340,000 to over $450,000.

While partisans on both sides (and the comments to the artcile are hardly borrower-centric) can blame borrower or lender in the usual manner, the starting point for this little slice of Americana was the loss of a job because of an economic collapse. Cutting to the quick, and echoing the 1992 Clinton campaign, "It's the economy, stupid."

Kanas & Co Cashing Out?

Two years ago, when BankUnited announced an IPO and private equity haters were screaming "cash out," I said it was too early to tell. When the IPO was later completed and the major private equity players retained an ownership stake, which was worth a heck of a lot of moola, I said that both critics and supporters of private equity had fodder to support their opposing positions. Last week, Kanas and Company announced that they may very well be looking to cash out, so those who hate the fact that private investors make money on failed bank deals can finally legitimately point their fingers at the principals and proclaim "J'accuse!"

The accusers are bent out of shape because the lowest cost bid for BankUnited was one in which private investors, in effect, recapitalized a failed bank (although they legally started a new bank that acquired most of the failed bank's deposits and assets), received a generous loss-sharing arrangement from the FDIC on the failed bank's assets, and, because they were one of the first PE horses out of the gate, negotiated a better deal than did most of those who subsequently tried to run the same race. In fact, it might be said that the negative publicity generated by this deal and a few others (the IndyMac transaction being another) soured the FDIC on private equity deals altogether. As the Wall Street Journal reported yesterday:

The deal was one of the few in which regulators allowed private-equity firms to take control of a failed institution on terms that are now considered to be lucrative. Since the deal took place, regulators have offered less rich terms to private-equity firms that are seeking to buy banks.The buyers paid $945 million for BankUnited. The FDIC gave them $2.2 billion in cash and agreed to reimburse as much as $10.5 billion in future loan losses.

As we've said previously:

Much of the prejudice against private equity appears to be based on the fact that it desires to make money on its investments. Isn't that what investors in any bank seek to do? The critical issue in the BankUnited deal isn't that the private equity investors might make money from an FDIC-assisted transaction, but whether the loss to the FDIC insurance fund will be less with the deal that was done than it would have been without that deal. I'm going to assume that the loss will be less, and therefore, that the FDIC was right to do the deal in the first place.

I still think that's the case. Moreover, the investment preserved jobs and the viability of a resuscitated financial institution that has grown in size and expanded into new markets under the current ownership and management. That sounds like a win-win, except for the fact that the stockholders made money on the deal. As we all know, in the current political climate, "profits" and "banks" are a deadly combination.

Well, we don't need to worry about a repeat of this "travesty of a mockery of a sham of a mockery of a travesty of two mockeries of a sham." As those of us who represent private investors in the banking business well know, the FDIC will never again make such a "mistake."

The Future Is…..Yesterday?

Occasional guest-poster Pat Dalrymple, who also occasionally blogs at his own venue, provided me with another missive that I wanted to pass along:

Three years ago or so, there was serious disagreement with the prevailing pessimistic prediction of the imminent demise of community banks.  The optimists, with a lot of justification, asserted that the unique position of the banks in their respective markets coupled with management’s unique ability to relate directly and personally to their customers needs would put these institutions in an enviable competitive stance as the industry emerged from the detritus of the Great Meltdown.

Today, once again, it appears that the optimists may be proved wrong.  Everything, including community banks themselves, appear to be conspiring against  the survival of this segment of the financial industry.

In fact, community banks can legitimately say, in the immortal words of Pogo the Possum in Walt Kelly’s classic comic strip, “We have met the enemy, and he is us.”

And small banks across the country have enough enemies without  being complicit in their own execution.  Everything, from regulatory scrutiny to compliance overload, have a greater negative impact on the little guys than the major leaguers.

It seems that the home town bankers are proving themselves to be much more of a traditional mindset than anyone suspected.  Maybe they’ve spent too many Christmas Eves watching  “It’s a Wonderful Life”.  Too often forgotten is the classic definition of insanity: “Doing the same thing repeatedly and expecting different results”.

Unfortunately, this attitudinal disconnect is hitting banks in the worst place possible: the mandatory focus on profitability going forward.

One can’t help but be a bit nonplussed when a CEO says that, when the dust from problem assets settles, “We did a good job with construction loans, so we’ll just do that”.  And where will they come from, with construction starts languishing?   Or, “Lending to small business has been our strength, and we’ll go back to doing what we do well”.  So, will your market area increase dramatically, to provide enough business loans which, by the way, are being sought by all of your competitors?

The depressing fact is that very few managers have a definitive new business model for their institutions.  A major reason for this is that they want to be what they were, and that, in most instances, simply won’t work.

There’s a lot of good advice and commentary out there on this, as far as it goes.  Some examples: 

Banks should focus on “The creation of well defined strategic plans focused on the bottom line”.   Or, effort should be directed  to “acquiring the right new customers, and retaining the best customers”, Or, engage in “Selective product innovation and more cross selling”.  Well, yes; but what strategic plan? How much will the “right customers” mean in actual revenue?  What products, and cross sell what to whom?

It’s like your pastor, priest or rabbi telling you “Be a good person and you’ll be happy”.  Thank you, Father, but what do I do to  be a good person?

When that question is answered, we often don’t like it, because it means changing the way we live, and some of those changes can involve hard choices, and be uncomfortable at best.

So it is when a bank’s management is faced with structuring a business model that, by necessity and definition, must  diverge dramatically from the present one.

Practically any CEO of a beleaguered bank,  currently agonizing over a business plan, possibly one that’s regulator mandated, will say, “We’ve done just about as much as possible in trimming  expenses.  There’s just no other place to cut”.  And this CEO is probably  100% correct, if the structure involves the bank as it was.  The bank, as it must be, may be an entirely different matter.  I once sat around a table with five or six other corporate poobahs  going through this very exercise, and the result was risible.  A few hundred dollars here, a thousand or so there.  This was a small institution, but there was about $800,000 in aggregate annual salaries represented there.  Not one of us had the courage, or perception of the situation to volunteer cutting his salary by, say, 15 or 20%. (We certainly couldn’t aver that we were worth all that much money, since the reason for the meeting was to fix a business that was losing money)

Of course, an even more radical tack often has to be taken on the income side, because that involves the assets and revenue generating mechanisms.  If your bank is a troubled one, the old way didn’t work, so don’t expect to go back to it and become profitable.   There weren’t enough good loans before, or the bank wouldn’t have a bunch of bad ones today, and there won’t suddenly be a whole bunch of good ones available for picking tomorrow.

The astute manage may, for public consumption, blame the institution’s woes on the economy.  But privately, the savvy CEO rejects that cop-out.  Many community banks made their living taking peripheral deals, betting on a burgeoning economy and continued appreciation in real estate values.  These loans weren’t the cream of the crop then, and  a lot of them were actually substandard.  These bets can’t be made again for a long, long time.  Your grand children may be able to go back to that kind of model.  If you’re running a bank today, fuggedaboudit.

Community banks do have a place in the future financial industry, if for no other reason than their positioning.  They’re embedded in their markets, and that’s an invaluable characteristic, difficult to achieve, almost as hard, sometimes, as choosing your parents.

Yet they won’t survive without a viable blueprint for profitability.

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Pat Dalrymple was a thrift executive for 35 years, 24 of them as a CEO.  His specialty is mortgage banking.  In 2008 his bank was sold, and he’s been a banking consultant working with troubled institutions for the past three years.  He says, “We were a very successful originator, unfortunately at the wrong time. We were hit with more repurchase demands than our capital could sustain, so we were compelled to unload our bank.  Not a particularly pleasant experience, but better than having the FDIC do it for you.  It turned out to be a great introduction to 21^st century banking.”

Most recently, he’s started a mortgage production operation in the Aspen, Colorado area.  “I devised a business model for troubled community banks that involved using their existing resources and positioning to engage in mortgage banking and brokering.  Great salesman that I am, I didn’t get anybody to bite on the idea, but there were some intriguing elements to it, so I sold it to myself, and started an origination business with a couple of partners.”

His company is Mountain West Mortgage LLC.  He can be reached at [email protected], 970-370-4857