Friday, December 14, 2007 12 days to Christmas---Please view Kit’s Kettle
Headlines--- Classified ads—Legal Please do not miss the exclusive in this edition: ######## surrounding the article denotes it is a “press release”
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--------------------------------------------------------------- U.S. FINANCIAL SECTOR: Outlook Negative in 2008
Fitch Ratings-New York- Fitch Ratings has released a series of 2008 rating outlooks for the U.S. financial sectors: banks, investment banks, and consumer finance companies. The outlooks for these sectors are all negative, while rating outlooks for commercial finance and asset managers are stable. These outlooks assume some further deterioration of consumer related asset quality and that liquidity in the fixed income markets remains fragile. 'Entering the final month of 2007, it remains difficult to determine with any precision when this will end and what will ultimately prove to be the antidote for this massive contagion. With the U.S. financial industry in the cross hairs, Fitch's rating outlook for this group of companies is negative, as we anticipate they will face severe headwinds for the foreseeable future as the turmoil in residential mortgage potentially spreads to other consumer asset classes,' she said. Liquidity and access to capital remain crucial rating factors. The banks and investment banks have built liquidity through the last third of FY07 although market costs are rising. The yield curve remains inverted and secondary trading in cash fixed income products is almost nonexistent. Funding will remain a real challenge if the securitization market remains as closed as it has for a prolonged period. Although easing monetary policies and potential government intervention may soften the impact of a slowing U.S. economy, a lower overall supply of liquidity and tight credit conditions will persist well into 2008 dampening current performance and potentially suspending growth prospects across the broader sector. Further analysis is available in the following reports, published today: --2008 Rating Outlook Negative for US Financial Institutions;
### Press Release ########################### Balboa Capital promotes Ontal as VP Broker Services
Still no official word about the alleged closing of the Balboa Capital, Irvine, California, Broker Division. A press release was issued following Leasing News inquiries as to what happened to Curt Lysne, the senior vice-president who established and ran the division. Reportedly he resigned. No one is talking The press release announced, " Patrick Ontal to Vice President of Broker Services. Mr. Ontal will be responsible for managing the Broker team at Balboa which will include providing outstanding service to the Brokers as well as hiring, training, and mentoring Balboa’s Broker sales team. Mr. Ontal’s previously held the title of Vice President of Vendor Services at Balboa." There was no announcement regarding whether he also was in charge of inside sales. The press release did say, “Mr. Ontal has over 21 years of leasing experience and is experienced in all aspects of sales and sales management. Prior to Balboa Capital, Patrick worked for US Express Leasing where he was responsible for the Technology segment’s inside sales team Previously, Patrick led the Franchise Finance sales team at Key Equipment Finance. Patrick has worked for other fine companies such as Sony Financial Services, Compaq Capital, and AT&T Capital Corporation. Patrick holds a Bachelor of Arts degree in Psychology from La Salle College in the Philippines. “ 'Now that I have assisted in the launching of the Vendor Services division, I am ready to provide outstanding service to both our existing broker’s base and the new brokers we intend to add. Our streamlined processes, advanced technology tools, and competitive rates will bring real value to brokers of all sizes' said Mr. Ontal." Balboa Capital and Evergreen Leases:
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-------------------------------------------------------------- Operating Leases Accounted for 12.1% of Total New Business Volume ELFA eNews Daily
According to the 2007 Survey of Industry Activity, operating leases as a percentage of new business volume was 12.1%. That's a 0.9% percent increase from the previous year (11.2%). Growth rates vary by type of organization, ticket size, size of organization, and origination source. ELFA's 2007 Survey of Industry Activity is now available. Conducted by PricewaterhouseCoopers LLP and aggregating the responses of 140 leasing and finance companies, the Survey is THE single most authoritative source of data on the equipment leasing and finance business. If your company is an SIA Respondent, FREE copies of the Survey report are available by contacting Bill Choi at bchoi@elfaonline.org or 202/238-3413. The Survey is available to non-respondents at http://www.elfaonline.org/pub/pubs/ProductDetail.cfm?product_code=RSIA2007 Member Price: $495
-------------------------------------------------------------- Along the way with Huntington's $1.5 Billion in Assets
Huntington Equipment Finance, a division of Huntington Bank, announced that they have originated more than $1.5 billion in assets under management as of Sept. 30, 2007. Launched in 2001, Huntington Equipment Finance realized more than $500 million in assets under management by mid-2006 and has more than tripled that record in the subsequent 18 months. The bank itself backed Preferred Capital, that went into receivership with many fraudulent transactions as well as NorVergence leases. California leasing company El Camino Resources, Virginia-based ePlus Group and Bank Midwest allege Huntington recognized signs of fraud at CyberNet in 2003. They sued Huntington for $17 million.
Last week the bank announced that Marty Adams will retire as president and chief operating officer effective December 31, 2007. Mr. Adams has served in his current position since the completion of the merger between Huntington and Sky Financial Group, Inc. on July 1, 2007. He will also step down as a company director at that time. Sky Financial Group has had its share of problems in the medical financial marketplace. Marty E. Adams joined Huntington as president and chief officer following the July 2007 merger with Sky Financial Group, where he previously served as chairman, president and chief executive officer. Huntington Equipment Finance has been the feather in the banks hat, primarily due to the two divisions they launched in 2006. The Machine Tool Finance group was established to focus on financing equipment and tools for closely held, small- and medium-sized manufacturing businesses. Huntington's Vendor Finance Group was established to provide businesses engaged in the sale of equipment the ability to offer financing to their customers. "Huntington has developed an extremely competitive equipment finance business thanks to a highly capable team that has the knowledge and expertise to meet customer needs in a timely and efficient manner," said Rob Allanson, President, Huntington Equipment Finance. "Additionally, our efforts over the past two years to diversify the business in key strategic areas have given our customers the ability to obtain the comprehensive set of services they need as they grow." -------------------------------------------------------------- Last Call: Leasing Books for Christmas
Now is the time to start thinking about Christmas presents. Leasing Books Books on Equipment Leasing by Source: Master Index Books
Linda Kester's book “366 Marketing Tips for Equipment Leasing” has gained quite a bit of traction since being released in late spring. Apparently, good sales ideas know few boundaries, as over 100 copies have been shipped to Australia, and a good many to other parts of the globe. As we expected, single orders are often followed by volume orders (30 to 50 is typical) for companies that want to put "Tips" in the hands of all their sales personnel. To assist the first lookers, we are waiving shipping and handling through the remainder of 2007 (a $6 dollar reduction on single copy orders) to reduce the "all in" investment cost to purchasers to $79.95. Volume pricing (bulk shipments in one package to one address) is always available on orders greater than five, ten, twenty-five and fifty copies. Here is the 14 pages content section, with all the titles to the pages of the book: To order, please go to:
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-------------------------------------------------------------- Campaign Money Links SBA Fraud Company to Key Lawmakers by Keith Girard
The largest loan fraud in the history of the Small Business Administration has created repercussions in Washington, but whether lawmakers are just rounding up the usual suspects or are actually serious about cleaning up the SBA's mess is open to question. An examination of federal campaign finance reports reveals a web of money among key lawmakers and the top executives who were supposed to be safeguarding SBA loans. We now know, as I reported in my column last week, that they were asleep at the switch and let a so-called "rogue" bank executive defraud the SBA's flagship 7(a) loan program out of at least $76 million before federal investigators broke up the scheme last January. The caper was dubbed "Cookie Jar Capitalism" but that's not the only cookie jar involved here. Allied Capital, its subsidiary Business Loan Express (BLX), and its top executives have given lawmakers almost $500,000 in campaign contributions in the past four years. By Washington standards, that's a modest amount of money. But the contributions have been directed with laser precision to House and Senate small business leaders. In fact, Allied and BLX are the largest contributors to House Small Business Committee Chairman Nydia Velázquez, D-N.Y. Combined, they donated $18,500 in political contributions, almost twice the amount of any other organization. The next largest contributor, the American Bankers Association, gave her $10,000. In all, Allied and BLX gave her almost 40 percent of the $49,800 she received from the securities and investment industry. The amount was exceeded only by the legal industry's $57,650 in donations, according to campaign records. Senate Small Business Committee Chairman John Kerry, D-Mass., also received contributions from Allied and BLX and/or their executives. But he at least appears more insulated from influence, thanks to copious amounts of money he raised (in excess of $23 million) for his presidential bid. Kerry also refuses to accept Political Action Committee (PAC) contributions. Even so, he collected at least $4,000 from BLX Board Chairman Robert F. Tannenhauser and another BLX executive, Scott Stapert. Meanwhile, Allied Chairman and Chief Executive William Walton has donated $143,300 out of his own pocket to Washington lawmakers since 2002. Nearly all of the money went to Republicans or conservative political action groups and small business committee leaders. Nor is Walton averse to spreading his bets. Among presidential candidates, he and other Allied executives have so far donated to Rudolph Giuliani ($6,900) and John McCain ($2,300). Tannenhauser, in contrast, gave about $90,000 out of his own pocket mostly to Democrats, including about $35,000 to the Democratic Congressional Campaign Committee. While he apparently has made no contributions to the current crop of presidential candidates, he gave $3,000 to Kerry, according to records. Other Allied Capital executives have contributed about $3,600 so far to Hillary Clinton and Allied's PAC has ponied up another $7,000 for her campaign. As the saying goes, money is the mother's milk of politics, and the spending pattern evidenced by Allied, BLX, and its executives is pretty common in Washington. Because they give to both Democrats and Republicans, their largesse reflects more of an effort to protect their interests rather than an ideological bent. They are obviously hoping to gain some influence. But how much? That question is not easily answered; it all depends on the lawmaker. What is evident, however, is the potential for a conflict of interest. As chairman of the House Small Business Committee, for example, Velázquez wields vast influence over legislation affecting the SBA or companies that do business with the agency. Given the amount she's received, at the very least she should return the contributions or recuse herself from all matters involving the BLX scandal. Kerry's money connection is minor by comparison. Even so, the suspicion remains. For example, during hearings before his committee in November, he was quick to soft-pedal BLX's culpability for the fraud and its overall management of government loan programs. "This hearing is not a 'gotcha' hearing," he volunteered in his opening statement. "The hearing," he added, "is not intended to hurt Business Loan Express." But after reports surfaced last week that the Department of Agriculture was forced to buy back $34 million in bad BLX business loans, Kerry quickly issued another statement. "I'm gravely concerned that there is a pattern of bad loans from BLX. When BLX testified last month, they said they were victims and the bad loans were isolated. BLX and the administration claimed they've got the lending problems under control. I don't think they do." Did Kerry deliberately soft-pedal the scandal at his own hearing, or was he simply caught off guard by the new disclosures (uncovered by the Washington Post)? Either way, he's got egg on his face. The close association between money and politics will never go away. But in matters like this, it's imperative that lawmakers demonstrate their ability to deal at arm's length with contributors. And when there is even a shred of doubt, they should always err in favor of the taxpayers, not special interests. -------------------------------------------------------------- Selling Up joins Financial and Training List
Financial and Sales Training Second Column: YCS - Year Company Started | YELB - Years in equipment Leasing Business
(A) Selling Up's Sales Management Operating System™ ( SMOS™) provides companies and business units of all sizes with a proven methodology and unique tools offering a comprehensive, flexible, scalable approach to managing all elements of the organizational sales process. Full list: http://leasingnews.org/Training/Financial_sales_trainer.htm -------------------------------------------------------------- Defaults Set New Record By Ted Cornwell
The percentage of loans in the foreclosure process and the number of loans entering foreclosure both reached record highs in the third quarter as loan performance continued to weaken across the board. While credit deterioration was widespread, the biggest increase in defaults was concentrated among adjustable-rate mortgages, especially those made to subprime credit quality borrowers. While subprime ARMs account for only 6.8% of loans outstanding, those loans accounted for 43% of foreclosures that were started during the third quarter. Prime credit quality ARMs, at 14.5% of outstanding loans, accounted for 18.7% of foreclosures that were started, according to the Mortgage Bankers Association's quarterly delinquency survey. MBA chief economist Doug Duncan said the third quarter marked the first time that the market felt the "full combined effects" of the collapse in the nonconforming mortgage securitization market, broad home price declines, economic weakness in much of the Upper Midwest and rate adjustments on ARM loans. "In Michigan and Ohio, the problem continues to be the declines in demand due to drops in employment and population that have left empty houses in cities like Cleveland, Detroit and Flint. In states like California, the problem is excess supply due to speculative overbuilding and properties coming back onto the market," he said. In California, a hotbed of ARM lending, the number of foreclosure starts on subprime ARMs during the third quarter equaled the number from 35 other states combined, according to the MBA. Mr. Duncan said that in high-cost California, homebuyers often had an adjustable-rate first mortgage with a second-lien ARM attached. Those home values started to fall just as monthly payments were adjusting upward. "It's the worst possible scenario for maintaining a high probability of people making their payments," Mr. Duncan said during a conference call with reporters. While the credit problem is nationwide, foreclosure and delinquency increases are concentrated in a number of states, including California. Other states with notably higher default rates include Ohio, Michigan, Indiana, Illinois, California and Florida. Mr. Duncan noted that in Michigan, six consecutive years of population outmigration have been accompanied by the loss of 340,000 payroll jobs. He called this "demand side destruction" that will continue to plague housing markets in the Midwest. And with 90-day delinquencies rising in big states like California and Florida, which have a hangover of homes on the market, the foreclosure problem probably hasn't crested yet. Nationwide, 5.59% of home loans of all types were at least 30 days past due in the third quarter, the highest delinquency rate seen since 1986. More tellingly, the foreclosure inventory rose to 1.69% of all loans, and the foreclosure start rate rose to 0.78%. Both the foreclosure inventory and start rates are at the highest level seen in the history of the MBA survey, which dates back to 1972. Meanwhile, holders of mortgage securities backed by subprime loans may feel more pain before the market turns around. The MBA now predicts that home prices will decline nationally not only this year, but in 2008 as well. Moreover, Mr. Duncan noted that as stronger subprime borrowers refinance and leave loan pools, the remaining loans in the pool will become incrementally weaker. (c) 2007 National Mortgage News and SourceMedia, Inc. All Rights Reserved -------------------------------------------------------------- Anatomy of a Fraud, a short story PROLOGUE What does Farmerville, Texas, Edmond, Oklahoma and Richmond, Illinois have in common? They are all great places to bring up a family…smaller towns with good housing, away from drugs and with fine schools. These towns are hardly the places you would expect to find a vendor producing millions in leases – or are they? Some of these small town vendors have developed elaborate web pages and reach a diverse population across the U.S. Is this a small town success story or just the beginning chapter in a sad tale of fraud that is symptomatic of the problem in our industry? Each of these towns have been identified as having a vendor using fraudulent or deceptive practices. While Edmonds has the larger population of 68,315 this story is centered on a vendor based in Richmond, Illinois (population 1612 by the 2004 census). It was settled over 150 years ago and still has remnants of the horse and buggy era - hitching rings embedded in the sidewalks on its main streets. It’s a Norman Rockwell painting. The other part of this story is about a leasing executive that I have known for many years as our paths have crossed time and time again. Today he is second in command of one of the fastest growing companies that provides financing to funders in our industry. His firm is one of our newest subscribers. This executive was ever vigilant by sending me the following just before his firm was set up as a subscriber: “Bernie - We just looked at a transaction that was very strange mainly due to the very large number of inquires. Just thought I would drop you the information”. What an understatement. !! Let’s begin.
ANATOMY OF A FRAUD
EPILOGUE We were lucky on this group. They made some tactical errors and came across some pretty smart leasing guys who could smell a bad deal and weren’t willing to wink at it. But as an industry under assault we must ask ourselves some pointed questions:
The answer is yes on all counts. I received recently from an executive of a fine big leasing company a memo which is indicative of the problem: “At the present time upper management will stay with the status quo, whether we like it or not. I guess we will have to pretend that D& B is accurate.” During good business times, many funders simply “wrote off” their fraudulent business as just the cost of doing business. In fact, for many broker funding sources, much of this cost was just billed back to the broker – after all, brokers must pay for fraud due to their Reps & Warrants agreements. Now, however, the business climate is tougher. Competition is fiercer, and with the economy slowing down, profits are harder to come by. More and more funders are now viewing fraud as a preventable expense. They are also viewing it as an event that can cause a “loss in confidence” in their credit personnel. Fraudulent vendors spend a lot of time and money setting up these scams, and when they are reported quickly, you dramatically raise their costs of business. Right now, the typical fraud vendor may operate his current identity for two or more years before the industry is well aware of their activities. Even if one leasing company discovers the fraudulent activities of the vendor, he can just shift his focus to another leasing company. Their business model is dependent on the fact that there is not an efficient network of communication in our industry. How successful would these fraudulent vendors be if everyone in the industry knew about them after being caught by just one person. That is the whole idea behind LeasePolice.com. In this case, these firms were just getting their operation going, but now they exposed to anyone using our system. Instead of doing a hundred deals before they are a “well-known fraud”, they can get away with one deal or maybe none. The return on their time and investment disappears, and lease fraud ceases becoming easy money. Lease fraud does not have to be something that is “just a cost of doing business. It is preventable and it can be drastically reduced. Bernie Boettigheimer, CLP
### Press Release ########################### Advantage Funding hires Hector Rivera as Collection Manager LAKE SUCCESS, NEW YORK, - Edward P. Kaye, President of the Advantage Funding group of companies announced that Mr. Hector Rivera has been hired as Collection Manager. “Mr. Rivera brings a wealth of knowledge and experience in credit, asset management, and collections management and we look forward to working with him as we continue to grow our business,” said Kaye. “I was attracted to this opportunity because it allows me to utilize my skills in a managerial role and be a part of a growing company. The company’s culture, spirit and potential are second to none and I’m fortunate to be part of the team,” said Mr. Rivera. Hector Rivera was most recently an AVP with Valley National Bank and a Vice President of BPD Bank responsible for managing the Consumer Loan Division. He also held positions with Commercial Bank of New York, First Bank of the Americas and Community National Bank & Trust Company of New York. Advantage Funding is a leading noncaptive specialty vehicle leasing and financing company to the ground transportation industry and is a Marubeni group company, the multinational Japanese trading conglomerate with offices in 74 countries and 5200 employees worldwide. For more information contact Edward Kaye, 516.280.1786, ekaye@advantagefunding.us or www.advantagefund.com. ### Press Release ###########################
News Briefs---- Deadly Storm Hits Northeast With Snow GE chief sees growth opportunities in 2008 Citigroup takes bold move to escape subprime mess Bombardier Gets $189 Million Turbostar Pact From Porterbrook Leasing Lufthansa’s investment in JetBlue, the struggling discount carrier, is the latest example of a foreign company’s taking advantage of the weak dollar to invest in a prominent American company. ---------------------------------------------------------------
You May have Missed--- Spending on cell phones and landlines nearly equal ---------------------------------------------------------------
Sports Briefs---- Steroid Report Implicates Top Players in baseball Plan to sell the Chicago Cubs and Wrigley Field ----------------------------------------------------------------
“Gimme that Wine” Columbia Winery moving out of Woodinville What's in a wine term? Not much regulation in Europe More alcohol in US Wines than European A new low in wine: Paris Hilton nude in a can of wine Wine Prices by vintage ----------------------------------------------------------------
Calendar Events This Day Alabama: Admission Day National Bouillabaisse Day Saint feast Days
http://www.catholic.org/saints/f_day/dec.php ----------------------------------------------------------------
A “dork” refers to a whale’s penis and became an acceptable http://en.wikipedia.org/wiki/Dork_(word)
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Today's Top Event in History 1985 -- Wilma Mankiller takes the oath of office as the principal chief of the Cherokee Nation of Oklahoma, the first time a woman has headed a major American native Indian tribe ERRATA: Several people have written regarding Wilma Mankiller to say that her title was the first time since the European annexation of Amerindian lands and rights that a woman was recognized by the white people as a tribal chief. Evidently women “were” tribal leaders before the coming of the Europe [headlines]
This Day in American History 1763 – Fifty-Seven whites enter Conestoga Indian settlement, and in violation of a treaty made between the tribe and William Penn — to last "as long as the sun should shine, or the waters run in the rivers" — shot, stabbed, and hatcheted the three men, two women and one young boy they found there (more on 27 December). -------------------------------------------------------------- Football Poem
Print Bad Call Brick .
-------------------------------------------------------------- SuDoku The object is to insert the numbers in the boxes to satisfy only one condition: each row, column and 3x3 box must contain the digits 1 through 9 exactly once. What could be simpler? http://leasingnews.org/Soduku/soduko-main.htm -------------------------------------------------------------- Daily Puzzle How to play: Refresh for current date: --------------------------------------------------------------
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