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Mergers: Is The Industry Seriously Overvalued?

Between Q2 2013 and today, the plethora of mergers within the Mortgage Field Services Industry left a lot of people scratching their heads. With several deals poised to close over the next several months valued close to $100 Million in totality, analysts like myself are continuing to see the serious overvaluation of the Industry. I am bullish on the Industry what with all the fraud, deceit and corruption. None of the Players in the Game have cash reserves to speak of — make no mistake on that.

The path of the righteous man is beset on all sides by the inequities of the selfish and the tyranny of evil men. Blessed is he who, in the name of charity and good will, shepherds the weak through the valley of darkness, for he is truly his brother’s keeper and the finder of lost children. And I will strike down upon thee with great vengeance and furious anger those who attempt to poison and destroy my brothers. And you will know my name is the Lord when I lay my vengeance upon thee. — Jules Winnfield before putting a cap in the ass of those whom had it coming.

Most of you have no idea about what upside down means. The Industry has long had a standing rationale that educated Contractors are dangerous, ergo Foreclosurepedia. Fraud; fraud when we speak of the Reported Fraud Index (RFI) is down, way down. The problem is that it is costing a hell of a lot of money. The reality is that this Industry does not have a hell of a lot of money. Oh, there are corporate kingpins with hoards of cash; I am not talking about them. I am talking about the Regional Order Mills like HomeStar Property Solutions (HSPS) and others. Look, HomeStar is well over SIX MILLION DOLLARS upside down and what do they do? They open a new office.

In the macrocosm of our Industry, let me tell you where we are heading. I have two words: Glass-Stegall. Look, production is the inverse curve of legislation when juxtaposed. Giulio Sapelli, Professor of Economic History at the University of Milan, gives a good example of the situation over in Italy. Google him if you are not familiar as I am loathe to teach economics and geopolitical dynamics on the blog. In essence, though, Europe is at best extremely pissed off about Wall Street fucking them and getting off without even a slap on the wrist. The Winds of Change are hitting the Atlantic Shores and while Wall Street may continue with their Dick Displaying in a Mine’s Bigger Than Yours competition, the Financial Institutions know that Downing Street is going to tote the line only so far.

The Mortgage Field Services Industry has a political hegemony by and through Safeguard Properties. Regardless of anything that may be occurring around Safeguard Properties, they have already diversified across the board. At the end of the day, most of the Industry marches to the beat of their drum — most.

Yea, thou I shall walk through the Valley of the Shadow of Death I shall fear no evil for I am the baddest motherfucker there is. — Paul Williams in response to the multitude of attempts to silence Foreclosurepedia.

The Market is attempting to correct itself in a very odd way. Today, Altisource was apparently black balled from the Institutional Purchasing Market by US Department of Housing and Urban Development (HUD). While Altisource was on a price drop by the time HousingWire published their article quoted, as of 1552EDT, they were up 2.25 for the day (it will probably zero out by close). More on point, though, I do not buy into the Herd Mentality that Altisource is per se the bad guy. Benjamin Lawsky is on a shakedown of Ocwen. Now, whether or not it will or will not benefit the consumer, it is obvious that Lawsky’s war on Ocwen is having the intended consequences. It should be self evident that sometimes, valuation is dictated by outside influences. In the case of the Industry, sans Altisource, I believe we are going to see an eventual mid level collapse.

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