Attention!

Leasing News is looking for current information and/or experiences with Allied Health Care Services, Inc., 89 Main St., Orange, NJ 07050 for a Leasing News article. Please contact: kitmenkin@leasingnews.org

First Two Month UCC Filings:
http://leasingnews.org/PDF/UCC_AlliedHealthMay10.pdf

Last Three Year UCC (429) Filings:
http://leasingnews.org/PDF/UCCFilings3yearsMay10.pdf

Allied Health:
http://www.leasingnews.org/archives/Mar2010/3_05.htm#allied

Classified Ads---Operations

N. Phoenix, Arizona Kathleen Gibbons-Erler. Eleven years experience in all office operations, including but not limited to lease processing. Excellent follow up skills. References on Linkedin.com. kgibbons-erler@cox.net Resume

Acton, MA Strong experience in lease accounting, operations, & systems.   Implemented lease plus, Great Plains, networks. Excellent financial reporting and analysis skills. Looking for new opportunity. LinkedIn alexanderzlenz@gmail.com| Resume

For a full listing of all “job wanted” ads, please go to:
http://www.leasingnews.org/Classified/Jwanted/Jwanted.htm

Other e-Mail Posting Sites:
http://www.leasingnews.org/Classified/Posting_sites.htm

Marlin turns it Around!
by Christopher Menkin

While the Marlin Business Service (NASDAQ:MRLN) Securities Exchange Commission 8K filing is not as complete as a year-end filing, it certainly shows a remarkable turnaround. It reveals a change in direction with a net income of $1.2 million the first quarter, after a revamping of adding more salesmen, their training and expenses, starting up the independent broker division and its expenses and efforts.

Marlin was perhaps the first small ticket leasing company to see the change in the marketplace over almost three years ago, cutting back, downsizing, even getting out of the broker program (now starting back in it), plus starting an industrial bank, getting out of programs that weren’t working, but the efforts now seem to be paying off.

Again, it should be pointed out that the actual changes started late in the first quarter, and considering it, the trend is back in momentum at Marlin:

The keys to look here are the “Average Monthly Sources” as well as the “Approval Percentages.” More sources, higher quality submissions meaning more efficiency and less cost, and sales reps are up as well as brokers starting on board: a Very impressive start.

As far as the balance sheet goes, no short term borrowing, cash is up, net equity is up, and certainly better than the first quarter 2009 loss of $879,000. This company is positioned to grow. Their CEO saw the downturn first, maybe he is also first to see the up-turn in business in the United States.

"Despite the headwinds of a weak economy, we're encouraged by the favorable performance trends in our business," says Daniel P. Dyer, Marlin's CEO. "In 2010, our priorities will focus on growth and investing in the sales side of the business as we serve the credit needs of small businesses across the U.S. In doing so, we will continue to operate with the same discipline that has allowed us to navigate successfully through the current economic downturn."

First quarter 2010 lease production was $23.6 million, based on initial equipment cost, up 18% from $20 0 million for the fourth quarter of 2009. Approval rates on lease originations improved to 46% for the first quarter of 2010, versus 44% for the fourth quarter of 2009. The average implicit yield on new lease production was 15.32% in the first quarter of 2010. Net interest and fee margin is 11.12% for the first quarter 2010 compared to 10.08% in first quarter 2009. The Company increased its sales force 39% in first quarter 2010 to 53 full time equivalents.

At March 31, 2010, the Company has outstanding $97 8 million of leases and loans funded through its banking subsidiary, Marlin Business Bank, and has $85.1 million in FDIC-insured deposits outstanding at an average borrowing rate of 3.02% with a weighted average term to maturity of 2.6 years. First quarter 2010 average deposits outstanding were $81 4 million at a weighted average interest rate of 3.09%

Full SEC report:
http://leasingnews.org/PDF/Marlin%208K.pdf

Resource America "repositioning our leasing company"
by Christopher Menkin

"We are in the middle of repositioning our leasing company which suffered this quarter in part as a result of costs incurred to solidify that valuable franchise,” declared Jonathan Cohen, CEO and President, Resource America (NASDAQ@: Rexi), in his company press release, which also reported reporting a loss from continuing operations attributable to common shareholders of $1.2 million for the second fiscal quarter and six months ended March 31, 2010. It was confirmation of the Leasing News story written on April 13, 2010.

In the press release, Mr. Cohen was quoted as saying, "While we were pleased by events at Resource Capital, Apidos, and Resource Real Estate both during the quarter and immediately after it, we were disappointed by our loss this quarter after two profitable quarters; nonetheless we believe our recovery to stable profitability remains on track."

The loss this quarter was better than the loss from continuing operations attributable to common shareholders of $11.5 million for the second fiscal quarter and six months ended March 31, 2009; only $1.2 million.

There was no explanation of the “positioning statement;” however, Leasing News has been writing about it since the beginning of last year, with the latest on April 13, 2010 when Leasing News questioned the financial structure of LEAF Financial Corporation, especially in relationship to its parent Resource America. The SEC reports showed consolidations, cut back of employees, and operations. Most seriously affected has been LEAF-Specialty Finance, South Carolina, which has not been funding new leases for a period of two months and their brokers most likely have gone elsewhere by this time.

The South Carolina operation is also reportedly down to 12 employees servicing the portfolio primarily from NetBank days, along with the previous years business, down considerably, Leasing News is told by several sources. This unit is for sale, according to many reliable sources. Reportedly AJ Batt, former founder of ATEL Capital considered getting back into the leasing business, but appears more interested in the hedge marketplace. Resource America makes fees from buying and selling properties, including leasing portfolios, and the cash infusion would be good for the company whose main business is real estate management ( multi-family, apartments, industrial property, as well as leasing and finance.

The loss is not good for its borrowing ability. As noted in the April 13, 2010 article:

"LEAF Financial Corporation and Leaf Funding, Inc. are borrowers pursuant to a $100 million credit agreement dated as of July 31, 2006 with PNC Bank, National Association. The parties thereto have entered into an amendment dated as of March 31, 2010 that extends the maturity date of the credit agreement until May 15, 2010, while the parties negotiate the terms and documentation of a longer term renewal. Under the terms of the extension the maximum borrowing limit reduces by unused capacity in excess of $25 million if created by sales of commercial finance assets to any of the LEAF sponsored investment funds."

The May 6, 2010 press release noted:

"At March 31, 2010, borrowings include $96.5 million of borrowings under a non-recourse credit facility at LEAF, $17.6 million of corporate revolving debt, $13.5 million of senior notes, net of a discount, and $16.9 million of other debt, of which $13.5 million is in mortgage debt secured by the underlying properties."

It was noted by SEC filings:

"It appears PNC has extended, by another amendment, the Leaf warehouse line for 45 days, from March 31, 2010 to May 15, 2010. Amendments are needed to avoid a formal default to the main agreement. It also appears the $100M w/l capacity will be reduced further if Leaf sells assets to any of the funds over $25M. Does that mean PNC doesn’t want Leaf to have more than $25M of line capacity? The 8K report said the exact same thing with no further details."

In the highlights of the March 31, 2010 quarter of Resource America, their six month statement for their fiscal year: "The Company reduced its borrowings to $144.5 million at March 31, 2010, a decrease of $49.9 million from September 30, 2009. This decrease primarily reflects a $40.00 million reduction in borrowings on LEAF's revolving warehouse credit facility and a $9.5 million reduction of the Company’s two corporate revolving lines of credit."

By SEC filings it appears the $100M w/l capacity will be reduced further if Leaf sells assets to any of the funds over $25M.

The recent statement does not address this and the numbers in the consolidated statements of operation do not break apart the leasing entities, and may include other financing arrangements. Either way, the numbers are not good:

Commercial Finance (in thousands)
Three Months Ended
2010	$4,731
2009	$6,775
Six Months Ended
2010	$10,343
2009	$11,288

Resource America, Consolidated (in thousands)
Net Loss
Three Month Ending		Net loss attributable to common shareholders
2010	(1,847)	(1,232)
2009	(12,789)	(11,633)
Six Months Ended
2010	(1,259)	(261)
2009	(16,392)	(14,853)

If you are a lender seeing the nature business of the parent with holdings in Southern California and other troubled areas, the losses, the changes in the leasing industry, and the apparent slow reaction of the financial side that resulted in perhaps the new financial officers and other changes, you too would be suspicious about getting in deeper with this credit. To some, it appears a house of mirrors with fees and funds and structure, while others see the general nature of the business itself in trouble as small and medium size banks have continued trouble with construction loans, commercial real estate loans, and less “take out” money as the entire real estate market remains in serious trouble and has not recovered from the subprime and derivatives 1-4 and multi family housing bubble burst, including commercial properties affect by the overturn and perhaps “over-built”

In writing “Bank Beat” the overwhelming small and regional bank failures, meaning 50 branches and more, came from commercial and industrial real estate loans, not 1-4 multi-family properties. Other failures were in other related commercial real estate loans and apartment loans, as well as “land development.”

- The Trouble with LEAF and Resource America
   by Christopher Menkin
http://www.leasingnews.org/Conscious-Top%20Stories/leaf_resource.html

Bank Beat:
http://www.leasingnews.org/Conscious-Top%20Stories/Bank_Beat.htm

Full SEC report:
http://leasingnews.org/PDF/rescourceamerica1stq2010.pdf

 

Leasing Schools/Franchisors List—Only Three Now

In up-dating the Leasing Schools/Franchisors list, it was discovered six companies are no longer in business, and perhaps this is a reflection of what is happening.

A good example comes from Leasing Partners, now in the cupcake business:

Formed by Ken Glasgow, President of Corporate Capital Leasing Group, Inc. and Sal Cozza, President of Flexlease Financial, "Leasing Partners, LLC. was very successful in training new brokers, "We will be distinctly difference from other schools. The emphasis will be on 'Partners'."

"For $5900 we are offering a three day all expenses included (air, beach front hotel, meals) training session in Naples, Florida. It will be 'No BS' (boring statistics) training geared to enable the Broker to start making money the day they get home."

Today it is "Simply Cup Cakes."

"Sal & I decided that we can't encourage anyone to become a Broker right now considering the climate. I have been spending my time working with my wife's cupcake business, Simply Cupcakes of Naples www.naplescupcakes.com. Similar to our leasing training program, we train people to open their own Simply Cupcakes and have opened 13 so far with 6 more coming this summer www.yoursimplycupcakes.com

"By the way, they are not franchises. They pay a one time consulting fee and nothing after that. The www.yoursimplycupcakes.com web site tells all about our training programs."

Ken has a Facebook site for his store with 2,500 on it, and it is not only for individual sales, but birthdays, weddings, and well as other events. All cup cakes are with the best ingredients, separated eggs, you name it, and well for $2.95 each and cheaper by the tray.

www.yoursimplycupcakes.com
www.naplescupcakes.com

Global Leasing

Program  cost: $19,950.00

In 2003, broker/lessor Global Leasing founder Phil Dushey created a new division to train independent salesmen in all the aspects of finance, including leasing ,accounts receivable financing, business acquisitions, debt restructuring, working  and venture capital. His students have found great success and he spends most of his time now developing entrepreneurs, who also utilize his knowledge and sources of funds.“

" We are not superbrokers and have never been one. Occasionally we will co-broker a transaction ,but generally we function as a lessor for our own accounts. 2. Our website address for our training is www.globalbrokersystems.com   3 When we train our students we do not have them send transactions through Global. We set them up to deal directly with the lenders. We also require that all lenders who work with our students will automatically approve them to do business with them.  Also our current price for the program is $24,950  We also model our training program from the experience we have from being in the business for about 25 years that a broker needs to serve all of the financial needs of their clients ,whether it be equipment leasing ,factoring,acquisitions,SBA Loans or debt restructuring, we do it all."  

Philip Dushey

Global Financial Services
17 State Street
New York NY 10004
Email phil@globaleasing.com
Phone 212-480-4900

Mr. Dushay is also on the Leasing News Advisory Board

http://www.leasingnews.org/Advisory%20Board/Dushay_Phil.htm

----------------------------------------------------------------------------------------------------------

Lease One, Lynnfield, Massachusetts

Program Cost: $19,900.00

Since 1989 Lease One has been providing superior training along with unprecedented ongoing support to our broker network. With offices from coast to coast we proudly exhibit the foremost training experience available. Our one time initial investment will provide you with the training and support for the lifetime of your venture with no on-going fees (Hotel/Airfare/Materials/Leads are all included in this price).

“The Lease One Opportunity is the only turn key business opportunity that allows you to devote the time necessary to building a business, no need to worry about processing or underwriting your deals; we do it for you, forever! Our unique program is the only one that offers free marketing assistance along with a devoted graphics design department to enable you to creatively attract new customers to your business. Call us today or visit our website ( www.leaseoneopportunity.com ) to learn more about this exciting opportunity. We are Lease One; It's the Lease we can do!”

Joseph L. Angelo Jr.
Lease One Corp.
220 Broadway, Suite 102
Lynnfield , MA 01940
www.leaseoneopportunity.com

Leasing Industry Help Wanted

Sales

Interviewing Leasing Professionals With Proven Track Record and Established Book of Business. Envision Provides: 1) Established Funding Sources, 2) Fun Working Environment, 3) Full Benefits (Health Insurance, 401k), 4) Aggressive Commission Structure. Resumes To: careers@envisioncapitalgroup.com, Contact: Jeff Edwards (949) 225-1712 Envision Capital Group is dedicated to providing the best in class products and service to our employers, customers, vendors and partners in the small and middle ticket commercial finance industry. With over 50 years of combined experience we have the knowledge, skills, abilities and relationships to help you reach your goals.

Seeking originators with 5+ years small ticket and/or middle market experience and with established customer and vendor relationships. Remote office and on site positions are available. Please send resumes to: jobs@teqlease.com Attn: Mike Lockwood or Russ Runnalls CLP www.TEQlease.com

Please see our Job Wanted section for possible new employees.

Dennis Brown Summary Streamline Sales Tax Report

(Leasing News caught Dennis Brown, Vice President State Government Relations, Equipment Leasing and Finance Association in between Dallas where he was leaving the ELFA Legal Forum and going to Chicago for the AGLF-ELFA Public Sector Forum.

He is the person who also is involved in the leasing and finance aspects of the Streamline Sales Tax project.

The recent report was long, and perhaps not as well read as it should have been, so we asked him for a summary as it is important for this industry to be kept abreast: )

"The Streamlined Sales Tax (SST) system is being developed by state governments to assist states in administering a simpler and more uniform sales and use tax system. The Equipment Leasing & Finance Association (ELFA) has been engaged from the outset.

"Under the Streamlined Sales Tax Agreement a member state with local jurisdictions that levy sales or use taxes may elect to source the retail sale of tangible personal property or digital goods, excluding lease or rental, to the location where the order is received by the seller, which is known as origin sourcing. Leases and rentals have separate sourcing to the equipment location or destination sourcing. A rental store owner with non-recurring payments in his short term rental contracts for party equipment usually of 3 days duration has asked that an exception be written to the destination rule for leases that would allow his short term rentals to be sourced the same as a retail sale or origin sourcing.

" ELFA seeks to insure that this proposed amendment to the Agreement will not impact long term commercial equipment finance leases because that would require in-state lessors to alter their systems to source sales tax collection on intrastate leases differently than interstate transactions."

Dennis Brown
Vice President State Government Relations
Equipment Leasing and Finance Association
1825 K Street NW, Suite 900
Washington, DC 20006
Phone: (202) 238-3411
Fax: (202) 238-3401
dbrown@elfaonline.org
www.elfaonline.org

Full Report:
SST Board Debates Compensation, Prepares for Federal Legislation
By Daniel T. Schibley © 2010, CCH Incorporated
http://leasingnews.org/archives/May2010/5_05.htm#sst

 

Fernando’s View
By Fernando F. Croce

Superheroes (“Iron Man 2”) and toddlers (“Babies”) come to theaters, while DVD releases offer inspiring (“Invictus”), suspenseful (“Edge of Darkness”) and classic hits (“Film Noir Collector’s Edition”).

Iron Man 2 (Paramount Pictures): Robert Downey Jr. reprises his role as rich-arms-dealer-turned-superhero Tony Stark in this sequel to the 2008 box-office smash. Once again based on the Marvel Comics character and directed by Jon Favreau, it picks up where the previous installment left off, with Stark trying to combine his playboy lifestyle with his heroic persona as the metallic Iron Man. Since his identity is no longer secret, however, he has to deal with reporters, fans, and government officials who want the secrets behind his powerful armor. The biggest danger, however, comes from a ruthless new foe, Ivan Vanko (Mickey Rourke), who’s determined to take revenge on him. With smooth special effects and a cast that also includes Gwyneth Paltrow, Don Cheadle and Scarlett Johansson, it’s a breezy way to kick off the summer blockbuster season.

Babies (Focus Pictures): The idea of a feature-length documentary on babies may sound thin (how many different ways, after all, can an audience say “awwww”?), yet director Thomas Balmes’ movie manages to be stirring while still delivering the expected levels of adorability. Following four infants from birth to their first steps, it hopscotches from several corners of the world, collecting details from the toddlers as well as their environments. There’s Hattie in the buildings of San Francisco, Ponijao in a tribal village in Namibia, Mari in bustling Tokyo, and Bayarjargal in the grassy plains of Mongolia. Will the behavior of these children reveal distinct differences in each of their cultures, or will unifying similarities emerge to connect them all together? Check out “Babies” to find out, and see human moments as beguiling as in any Nature documentary.

Netflix tip: With Mother’s Day just around the corner, hit your queue for a hearty fill of cinematic mother love. Especially recommended: Joan Crawford in “Mildred Pierce,” Irene Dunne in “I Remember Mamma,” Shirley MacLaine in “Terms of Endearment” and, why not, Meryl Streep in “Mamma Mia!”

New on DVD:

Invictus (Warner Bros. Pictures): After proving (and investigating) the durability of his screen persona in “Gran Torino,” Clint Eastwood proves once again why he’s one of America’s most respected directors with this inspiring, true-story tale set during South Africa’s most trying times. Nelson Mandela (Morgan Freeman) has just been elected president, yet the country remains torn in the shadow of apartheid’s racially divisive policies. In order to bring the people together, Mandela turns to the universal appeal of sports, and tries to get the country’s rugby team into the 1995 World Cup. Though the movie hardly lacks the excitement and crowd-pleasing drama (including the travails of the team’s captain, played by Matt Damon) of conventional underdog sagas, it is also filled with keen cultural observations about a country’s past and humanity’s need to stick together during hard times.

Edge of Darkness (Warner Bros. Pictures): After taking some time off to concentrate on his directorial career, tough-guy icon Mel Gibson returns to the screen with this punchy action thriller. Gibson plays Thomas Craven, a veteran Boston homicide detective who loses his beloved daughter during a gangland hit. Was she the victim of an underworld vendetta, or was this just the tip of an iceberg of systematic corruption? Looking for answers (and revenge), Craven embarks on a brutal one-man journey. The plot is not exactly original (the Liam Neeson thriller “Taken” had a similar outline), but action specialist Martin Campbell (“Casino Royale”) and Gibson’s taut charisma keep things marching along towards an engrossing conclusion.

Film Noir Collector’s Edition (Questar): Film noir has always been one of the most enduringly fascinating genres, and serious cinema lovers should not miss this five-disc set of classics. Titles include the severe 1945 drama “Scarlet Street,” with Edward G. Robinson as a meek married man fascinated with a femme fatale (Joan Bennett), and “The Stranger,” Orson Welles’ moody look at the dark forces lurking under the wartime surfaces of a small town. Also among the highlights are two of the harshest noirs ever made: “D.O.A.,” a harrowing tale of a dying man seeking his own killer, and “Detour,” a master class in low-budget filmmaking that should be viewed not only by students of noir, but also by aspiring directors.

Leasing Conference---Up-date

Plan your fall conferences to get on board the changing equipment leasing marketplace.

September 24-25
2010 NAELB Eastern Regional Meeting
Renaissance Atlanta Airport Concourse Hotel
One Hartsfield Centre Parkway
Atlanta, Georgia

By phone - Contact (888) 391-8724 or
(404) 209-9999 and please identify yourself
as an NAELB Eastern Regional Meeting attendee

---

October 15-17
NEFA Funding Symposium Fall 2010
The Ritz-Carlton, Buckhead
Atlanta, Georgia

Registration is scheduled to open this summer.

---

October 24-26
ELFA 49th Annual Convention
Boca Raton Resort & Club
Boca Raton, Florida

---

November 12-13, 2010
NAELB Western Regional Meeting
Hilton Orange County / Costa Mesa
3050 Bristol Street
Costa Mesa, California

To make hotel reservations by phone - Contact (714) 540-7000 or (714) 438-4923
and please identify yourself as an NAELB Western Regional Meeting attendee

 

Culver City, California---Adopt-a-Dog

Melody

Breed: Chihuahua Mix
Size: Small 25 lbs (11 kg) or less
Color: Tan/Yellow/Fawn - With White
Sex: Female
Age: Young
Melody is:
already spayed
good with kids
good with dogs
up to date with shots

Melody's story..."Melody is the sweetest little love bug you can ever meet. She is adorable with people, especially kids. She is find with other dogs, but does best with passive dogs. Melody is about 1 years old, weighs about 8 pounds. She is vaccinated, microchipped and spayed. What a lovely little dog for seniors, couples with limited living space, or with a family with large yards where she can run and play. If interested in meeting our little Melody, please contact Mary Chatman at 323 758 8992 or email maryslittlelambs@att.net.

Contact this rescue group to adopt Melody ...
Rescue Group: Mary's Little Lambs Animal Rescue
Phone: (323) 758-8992E-mail: maryslittlelambs@att.net
- Let 'em know you saw "Melody" on Adopt-a-Pet.com!
Fax: (323) 758-8992
http://www.adoptapet.com/pet3642897.html

Address:
Culver City , CA
90230

Adopt-a-Pet by Leasing Co. State/City
http://www.leasingnews.org/Conscious-Top%20Stories/Adopt_Pet.htm

Adopt a Pet
http://www.adoptapet.com/

Charlie Lester Explains the Start of the Private Label Program

Lou Schneider of Preferred Lease reported his company was the first to market a credit card concept, when actually the first was actually Trans Leasing International, Inc., of Northbrook, Illinois. The card was the LeaseCard. Direct Capital co-started by Schneider's partner David Murray was second, and third was Preferred Lease, which was purchased by Capital Werks.

This brought up the subject of the birth of private label program, and at the start, Charlie referred to himself as Grandpa Charlie, thus the GC:

LN: It sounds like the Private Label Recourse Program could be taken to a community bank or to any lender so interested, in a recourse or non recourse manner. The broker is a “discounter”. How does the recourse program work?

GC. Private Label Recourse Programs—the recourse part is critical since American Express does have non-recourse private label and they are totally different.

In a recourse program, the broker is given a credit window by the funding source that commits to buy the lease paper if deals fit the window. The broker does the entire credit workup, makes the credit decision and documents all leases in its name. The broker also pays all vendors and sub-brokers. Periodically, the broker forwards the leases to the funding source where an analyst verifies the deals do in fact fit the credit window and the broker is then paid. Part of the broker proceeds is usually withheld as a loss reserve.

After the deal is booked, the monthly payments are billed in the name of the broker with payments going to a lock box. Normally, the broker also receives 50% of all late fees.

LN. What are the major advantages and risks to brokers and funding sources in a recourse program?

GC. The overriding advantage for everyone is higher volume and higher profits. In addition, the broker has more name recognition since the broker’s name is on everything received by the lessee with the funding source being the silent partner.

The major risk for the broker is the possible failure of the funding source to provide timely delinquency reports so problem accounts can be spotted early and collection efforts stepped up. Another broker risk occurs if the funding source picks and chooses deals to buy instead of honoring the credit window provided. In this case, the broker has to find another funding source or fund the deal out of his own pocket.

The funding source has a number of risks including the possibility that the broker will not have the financial strength to repurchase deals in default. Undisclosed split deals are another major risk. In addition, there is dependence on the broker not to manipulate the portfolio delinquencies.

LN. How does the broker know when the funding source has failed to provide timely data?

GC. Unfortunately, it can take 6-24 months before problems become apparent. The ATT fiasco in the mid-90’s is a classic example of a funding source that had so many computer platforms and data bases that reports were full of errors and corrections almost impossible to fix. In some cases, personal property taxes were not billed for a two-year period and when they were billed, the responsibility to collect them fell back on the recourse broker. In cases like the one with ATT, it is almost impossible to determine how many additional deals went into default as a result of poor quality delinquency reports, but common sense says the damage has to be high.

LN. How does a funding source know when they have problems with a recourse broker and how do they verify them?

GC. Again, it can take time and constant monitoring before problems surface. Most recourse brokers are strong financially and honest to a fault, but they do have a much larger window of opportunity to cheat the system. This window includes hidden early payoffs, sales taxes not paid, split deals and monthly payments made for lessees in default to prevent a repurchase.

Once a funding source has serious questions about the honesty of a recourse broker, the normal procedure would be to “drop the corporate veil”. This is a drastic step since it means converting all monthly invoices to the name of the funding source instead of the recourse broker. The funding source then waits to see what if any complaints are received from the lessees. They also compare monthly invoices with checks received to see if there is a match. In addition, UCC filings may be audited to see if deals have been split or duplicated. Last, but not least, the deals and financial statements of the broker are audited to see if the required reserves have been maintained and contract terms have been honored.

LN. To your fellow brokers, would you recommend they pursue recourse relationships?

GC. No. In my opinion based on ten years experience as a recourse broker with ATT, CIT and First Sierra, the extra upfront profit and name recognition is not worth it. Being on recourse is like making love to a gorilla, you stop when the gorilla wants to, not when you want to. No matter how much you plan and reserve for losses, even the strongest broker will have a hard time meeting it repurchase obligations in a down economy. A poor economy with a few bad credit decisions can bankrupt any recourse broker unless they have a strong parent bank or just happen to be the favorite relative of Bill Gates. Being a non-recourse broker is three tranquilizers a day, but recourse is ten per day with a bottle of Tums for dessert.

LN: Sounds like there are a lot of pitfalls.

GC: Everything can go wrong at both the funding source and broker levels if either side is incompetent, dishonest or if either one does not live up to its commitments.

The funding source must honor the credit window they assign and not pick and choose what they will buy on a subjective basis outside the window. The funding source must also have adequate computer systems that keep the recourse broker updated on almost a real time basis as to what is happening in his portfolio so problem accounts can be spotted early on and cured. The longer it takes to detect a problem account, the greater the odds that the broker will have to repurchase the entire contract and legal recoveries after the repurchase average less than 30% of the repurchase amount. Only the collection attorneys who charge 30-45% of the amounts recovered love a repurchase.

To protect itself, the funding source must have high quality people to monitor the recourse brokers for financial strength, honesty and operating practices. Unfortunately, the relationship between the funding source and broker can get so warm and personal that reserves are reduced, PG's are released and company financial statements are not closely monitored on a timely basis to see if there are changes in financial strength. They also must have very competent analysts to assure that all deals bought are in the credit window and free of fraud.

Everyone loves a good war story--so here is one I know first hand from 1991 when Lease Pro, Inc. signed the first recourse agreement with Denrich until August 30, 2001 when we received our check for late fees from CIT and closed the portfolio. Due to long recourse period, I have always compared recourse to making love to a gorilla--you stop when the gorilla wants to, not when you want to. The gorilla is now gone and I am slowly beginning to heal.

A good example of a funding source failing to meet it commitments to its recourse brokers was the ATT fiasco in the mid-90's. A situation that did not get much better as the portfolio moved to Newcourt and then to CIT. With each move, fewer and fewer people knew how to manage the recourse relationships. A simple payoff request could take 3-5 days to receive.

After ATT had purchased Denrich Leasing and the qualified portfolio managers like Bob Quinn and Pete Smith had resigned, recourse brokers had to live with delayed and incorrect reporting caused by inexperienced personnel hampered by the ATT data bases being on three different computer platforms.

Misapplication of monthly payments was a common occurrence and getting corrections made was like trying to make the sun rise in the west. The real disaster came when the ATT system failed to bill for personal property taxes for as much as two years and the burden of collecting the back taxes was placed back on the broker. As you might guess, the broker paid most of these taxes without going back to the lessee.

As you can see, funding sources have responsibilities that could bankrupt a good recourse broker if they do not live up to there part of the bargain. I did not go bankrupt due to the ATT problems, but I sure bled a lot.

http://two.leasingnews.org/archives/September01/9-05-01.htm

Charlie today is at Altus Hospice

Altus House
Charlie Lester - Room 6
5411 Northland Drive NE
Atlanta, Georgia 30342
http://www.altushospice.com/index.php

Classified ads—Operations / Remarketing / Repossessions

Operations: Houston, TX Silverlake Inspections LLC is an independent contracting company for real estate and equipment verification with pictures. Email: jimh05@sbcglobal.net	Operations: Portland , OR Portfolio Financial Servicing Company provides state of the art portfolio servicing for portfolios of all sizes. 800-547-4905 sales@pfsc.com
Operations: Roseburg, OR Tired of paying a full time documentation person? Try outsourcing. Ideal for anywhere in the USA. E-mail or Call Trina Drury 541-673-4116 or 541-784-7973. email: doc_prep@yahoo.com	Remarketing: Nassau Asset Management Specializing in: Repossession, remarketing, plant and fleet liquidation, skip tracing and collections. All types of equipment. Over 160 locations nationwide. We will tailor any remarketing program to your specific requirements.  www.nasset.com   Contact: ECast@nasset.com ELA,NAB T ,EAEL,NAELB,UAEL
Repossessions: Canada Cease Bailiff Services Incorporated: Asset Investigation/Tracing; Asset Recoveries; Asset Protection/Security Asset Liquidations/Sales; Ottawa, Canada; www.ceasebailiff.ca dave@ceasebailiff.ca; Phone 613 898 7376 ; Fax 613 225 2452	Remarketing: Los Angeles, CA Video, Audio, Film, Computer, IT, Test, Presentation Equipment We pay cash / 3 million in buying power /Quick Quotes UBG 800-570-5224 jon@usedvideo.org

Leasing Industry Outsourcing (Providing Services and Products)

All "Outsourcing" Classified ads (advertisers are both requested and responsible to keep their free ads up to date:
http://www.leasingnews.org/Classified/Outsourcing/Outsourcing.htm

How to Post a free "Outsourcing" classified ad:
http://www.leasingnews.org/Classified/Outsourcing/Outsourcing-post.htm

 

News Briefs----

Market Drop Fueled by a Crisis, Anxiety and an Error
http://www.nytimes.com/2010/05/07/business/economy/07norris.html?hp

High-Speed Trading Glitch Costs Investors Billions
http://www.nytimes.com/2010/05/07/business/economy/07trade.html?ref=business

Asian markets jolted by Eurozone debt fears
http://timesofindia.indiatimes.com/biz/international-business/Asian-markets-jolted-by-Eurozone-debt-fears/articleshow/5901556.cms

86% Banks move away from Commercial Real Estate loans
(The percentage of bank failures from "Bank Beat" show how failures in commercial real estate loans, not subprime residential mortgages. Editor)
http://www.cfo.com/article.cfm/14495545/c_14496449?f=home_todayinfinance

Senate vote defeats move to cut financial watchdog powers
http://www.usatoday.com/money/industries/banking/2010-05-07-financialoverhaul07_ST_N.htm

Geithner and Paulson say more financial regulation is needed
http://www.usatoday.com/money/companies/regulation/2010-05-06-financial-crisis-commission_N.htm

Bernanke: Fed is working to get credit to small business
http://www.usatoday.com/money/industries/banking/2010-05-06-bernanke-bank-loans_N.htm

Mortgage rates dip for 2nd week
http://www.bankrate.com/finance/mortgages/mortgage-rates-dip-for-2nd-week8-145499.aspx

Forecasting the Recovery for Banks' Loan Losses
http://www.collectionscreditrisk.com/news/is-the-year-loan-losses-turn-the-page-3001625-1.html

You May have Missed---

College grads face tough job search
http://www.chicagotribune.com/business/columnists/ct-biz-0506-burns--20100506,0,2974339.column

Sports Briefs ---

Oakland Raiders release quarterback JaMarcus Russell
http://www.contracostatimes.com/ci_15032311?source=most_viewed
http://www.contracostatimes.com/raiders/ci_15036211?source=autofeed#

San Jose Sharks have nightmarish outing losing 7-1 to Detroit Red Wings
http://www.contracostatimes.com/top-stories/ci_15035162?nclick_check=1

St. Louis Rams appear to be on verge of trading Alex Barron
http://www.stltoday.com/stltoday/sports/stories.nsf/rams/story/ A8C94FFAFED307E58625771B007E2B09?OpenDocument

“Gimme that Wine”

 

My next door neighbor Jerry Lohr Awarded Professional Excellence in Oenology from New York Institute of Technology
http://www.winebusiness.com/people/?go=getPeopleArticle&dataid=73836

Moonshine Finds New Craftsmen and Enthusiasts
http://www.nytimes.com/2010/05/05/dining/05white.html?ref=dining

Latour is top wine of Bordeaux 2009, says survey
http://www.decanter.com/news/297723.html

May 8--Free--Afternoon in the Napa Vineyards
http://www.napavalleyregister.com/news/opinion/mailbag/article_6f1a3cc8-58bf-11df-86b9-001cc4c03286.html

 

Free Mobile Wine Program
http://leasingnews.org/archives/Feb2010/2_26.htm#mobile

Wine Prices by vintage
http://www.winezap.com
http://www.wine-searcher.com/

US/International Wine Events
http://www.localwineevents.com/

Winery Atlas
http://www.carterhouse.com/atlas/\

Leasing News Wine & Spirits Page
http://two.leasingnews.org/Recommendations/wnensprts.htm

Baseball Poems #  1  by  Brendan Awerbach Baseball is a game,  It has a Hall of Fame. In Cooperstown, it's there, Getting in is so rare. Baseball! Doubleday is the father of the game we know, Or is it really so. Playing in the late 1800's,  In front of crowds that were smaller then a hundred. Baseball started in a very small way, People needed to know how to play. By the 1920's after the Black Sox scandal, Baseball was changing and people started to get the handle. The Yankees of the 30's and 40's started to create quite a sensation, as baseball fever gripped the eastern part of the nation.  Ruth, Gehrig, Cobb, Johnson and Young all became the names of the day, They would be the first to be in the Hall of Fame in a great way.  Baseball from the late 30's to the mid 40's took a back seat to the war, but in the late 40's and 50's came back with roar. A new generation of players were around, Led by Feller, DiMaggio, Williams and Snyder, the stars seemed to abound. The 60's and 70's gave us more greats, Koufax, Yastremski, Mays, Aaron, Mantle and Maris, Baseball was known and played from the US to Paris. As we entered the 80' and 90's, more stars came around, Griffey, Ripken, Mcquire, Jackson, Ryan and Smoltz , all are the players that will astound. The Hall of Fame is where all the greats are enshrined, To hear their stories and tales can take a lotta time. To understand baseball is not very tough, And if you love the game, you can never get enough.