It’s been a while since I’ve had a “Why I hate my industry” but here’s one that may become my #1, all-time “WIHMI” king. Let me recount the story for you all.

Recently, driving home from work on the 5 freeway in South Orange County I was passed by a large blue pick up truck, with big wheels, a lift kit, custom exhaust, etc., and as they blazed by me I noticed their personalized California license plate: “MAX FEES”. Seeing as one of the favorite refrains of “top producing” loan officers echoing around the bars of Orange County over the last few years has been the term “MAX FEES”; I’m going to guess that this person is in the mortgage industry. Even if they are not they are an embarrassment to any industry. To flaunt arrogance (or is it stupidity) with a personalized license plate that champions taking advantage of people borders on the absurd.

But, I’m going to bet that this person is in the industry; and if they are they are a terrible human being. They have reached a level of depravity that is nearly unthinkable. To the owner of that truck - are proud of the fact that you rip people off for a living? Are you so proud of your ability to lie to pressure a family in to signing for a toxic loan while wiping out their home equity that you go and order a CUSTOM LICENSE PLATE COMMEMORATING YOUR ACHIEVEMENT? I mean, seriously - what is wrong upstairs? What made you think that getting a license plate that says MAX FEES on it was a good idea?

It’s not a mark of pride - it’s a mark of shame. It’s a scarlet letter - that license plate is the physical manifestation of the wrong that has been wreaked on the American public by people in the mortgage industry. It is the definition of all that I hate in the mortgage industry. Whoever is driving around with that license plate, MAX FEES, can’t call themselves a professional; unless they consider themselves a professional rip-off artist. What a joke.

Seeing that car on the freeway made me furious that there is someone in the mortgage industry that can so brazenly show-off their thievery; it made me sick to my stomach.

If there is one reason why I started Blown Mortgage it is to diffuse the power of those who choose to use their position for harm instead of for benefit. MAX FEES if you are still working in the mortgage industry your time is coming; if you’re not good riddance - I hope karma kicks your ass.

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A project that I’ve meaning to get to for a long time now is finally live on the site. I’ve created a Mortgage Terms Glossary of some of the more common terms used in home lending and mortgage. I’ll continue to grow the list as I revisit the project. You can get to the mortgage term glossary by clicking on glossary in the header navigation.

I hope that prospective and current home owners and mortgage holders find this a valuable resource to understand the world of home lending.

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Filed under: Newspapers

In August, BloggingStocks’ Kevin Kelly wrote about signs that the credit crunch could have a material impact on the ability of Hollywood to finance movie projects.

Sunday’s New York Times writes about the recent emergence of special funds for investing in Hollywood productions, including the $600 million Gun Hill Road 1, a fund maintained by Gun Hill Road LLC. These funds are fueled by dollars from hedge funds and private equity firms

According to The Times, “All of the hand-wringing leads to a basic question: What if some of the hedge fund and private equity guys (and they are still mostly guys) pack their bags and head home to Connecticut? How bad off would the studios really be? One answer is this: A little less money might not be a bad development for studios and, heaven forbid, for moviegoers.”

Apparently the willingness of hedge funds and private equity types to invest in these projects (I would speculate that many of these former high-school-nerd money managers invest in films not to generate a ROI, but rather to boost their EGO, and show those kids who made fun of their pocket protectors what’s what) has lead to a movie glut, with a lot of sub-par, big budget movies getting financed that never should have. Doesn’t that sound a lot like the last months of the private equity bubble?

In any case, maybe a decline in the dollars available for movie productions wouldn’t be such a bad thing. Perhaps Hollywood can get away from its infatuation with special effects and big names, and focus more on creativity and art.

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Filed under: Consumer experience, Newspapers, Competitive strategy, Marketing and advertising

You don’t mess with a shopper’s coupons — Macy’s (NYSE: M) has learned that lesson the hard way.

According to The New York Times, “For years, the department stores that Macy’s acquired … had relied on 15- and 20-percent-off coupons to alert people, like a Pavlovian bell, that it was time to shop. As part of its reinvention, Macy’s tried to wean shoppers off them. But the tactic backfired. With fewer coupons to clip, thousands of people from Washington to Los Angeles turned their backs on Macy’s.”

Now Macy’s is jumping back on the coupon bandwagon, and is pledging that there will be plenty for clippers to cut this holiday season.

It’s puzzling why Macy’s decided to move away from coupons in the first place. It seems like an ingenious way to dole out savings to consumers: non price-savvy shoppers won’t clip the coupons and therefore won’t get the savings. This way, the store avoids giving discounts to a lot of people who would have purchased the clothing without them in the first place.

Historically, corporate America has always had trouble weaning shoppers off coupons. Macy’s is just the latest in a long history of companies that have failed at it. Few smart shoppers are probably surprised that the efforts have failed, and now Macy’s will allow our love of coupons to continue.

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Filed under: Newspapers

In August, BloggingStocks’ Kevin Kelly wrote about signs that the credit crunch could have a material impact on the ability of Hollywood to finance movie projects.

Sunday’s New York Times writes about the recent emergence of special funds for investing in Hollywood productions, including the $600 million Gun Hill Road 1, a fund maintained by Gun Hill Road LLC. These funds are fueled by dollars from hedge funds and private equity firms

According to The Times, “All of the hand-wringing leads to a basic question: What if some of the hedge fund and private equity guys (and they are still mostly guys) pack their bags and head home to Connecticut? How bad off would the studios really be? One answer is this: A little less money might not be a bad development for studios and, heaven forbid, for moviegoers.”

Apparently the willingness of hedge funds and private equity types to invest in these projects (I would speculate that many of these former high-school-nerd money managers invest in films not to generate a ROI, but rather to boost their EGO, and show those kids who made fun of their pocket protectors what’s what) has lead to a movie glut, with a lot of sub-par, big budget movies getting financed that never should have. Doesn’t that sound a lot like the last months of the private equity bubble?

In any case, maybe a decline in the dollars available for movie productions wouldn’t be such a bad thing. Perhaps Hollywood can get away from its infatuation with special effects and big names, and focus more on creativity and art.

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Filed under: Products and services, Competitive strategy, Starbucks (SBUX), McDonald’s (MCD)

McDonald’s Corp. (NYSE: MCD) and Starbucks Corp. (NASDAQ: SBUX) have been trying to cut into each other’s businesses for a while now, with McDonald’s introducing premium coffee and Starbucks its breakfast sandwiches. After test marketing cappuccinos and iced coffee in various markets, McDonald’s is ready to take its rivalry with Starbucks to the next level by rolling out a makeover of all its U.S. restaurants by 2009 to feature specialty beverages such as coffee drinks, smoothies, energy drinks, and other bottled beverages.

Specialty drinks have higher profit margins than sandwiches, and McDonald’s estimates this “Made for You” campaign could boost sales by as much as $1 billion a year. Results from test markets in which the plan has already been tried suggest that it doesn’t require additional staff and that it doesn’t slow down service, but counters and drive-thru areas do have to be remodeled to make room for new equipment. Some franchisees are concerned about the costs of such renovations.

This has to be better news for McDonald’s investors and watchers than Moody’s downgrade of McDonald’s last week due in part to competition and labor and energy costs. Shares fell 54 cents, or 1.1 percent, to $54.26 after the Moody’s announcement, but closed Friday at $54. 47. On the other hand, a Goldman Sachs analyst has McDonald’s as a top pick in the otherwise mixed restaurant sector, for its global strength. Starbucks was downgraded last week as well.

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Filed under: Consumer experience, Newspapers, Competitive strategy, Marketing and advertising

You don’t mess with a shopper’s coupons — Macy’s (NYSE: M) has learned that lesson the hard way.

According to The New York Times, “For years, the department stores that Macy’s acquired … had relied on 15- and 20-percent-off coupons to alert people, like a Pavlovian bell, that it was time to shop. As part of its reinvention, Macy’s tried to wean shoppers off them. But the tactic backfired. With fewer coupons to clip, thousands of people from Washington to Los Angeles turned their backs on Macy’s.”

Now Macy’s is jumping back on the coupon bandwagon, and is pledging that there will be plenty for clippers to cut this holiday season.

It’s puzzling why Macy’s decided to move away from coupons in the first place. It seems like an ingenious way to dole out savings to consumers: non price-savvy shoppers won’t clip the coupons and therefore won’t get the savings. This way, the store avoids giving discounts to a lot of people who would have purchased the clothing without them in the first place.

Historically, corporate America has always had trouble weaning shoppers off coupons. Macy’s is just the latest in a long history of companies that have failed at it. Few smart shoppers are probably surprised that the efforts have failed, and now Macy’s will allow our love of coupons to continue.

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Filed under: Internet, Scandals, Citigroup Inc. (C)

In June, I wrote a nice rant about credit card offers I was receiving with the words “Remove contents before you discard.” I thought, and others agreed, that the offer implied that I needed to open the envelope to avoid the risk of identity theft.

Now Citibank is attracting controversy by mailing 3.5 million credit cards to department store customers who didn’t ask for them. The cards are being sent to customers who who have had inactive accounts for more than two years.

According to CNN, “A federal law dictates that banks can issue credit cards only when customers request them or they replace existing cards. Citi considers the cards replacements to the Macy’s cards already accepted by the customers.”

Calling new cards sent to customers have been inactive for two years seems pretty aggressive, and consumer advocates have expressed concern that the personal information of customers could be breached.

Citi is playing pretty fast and loose with the law here. Customers shouldn’t receive credit cards in the mail that they didn’t ask for and don’t want — and that is exactly what is happening here.

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Filed under: Products and services, Competitive strategy, Starbucks (SBUX), McDonald’s (MCD)

McDonald’s Corp. (NYSE: MCD) and Starbucks Corp. (NASDAQ: SBUX) have been trying to cut into each other’s businesses for a while now, with McDonald’s introducing premium coffee and Starbucks its breakfast sandwiches. After test marketing cappuccinos and iced coffee in various markets, McDonald’s is ready to take its rivalry with Starbucks to the next level by rolling out a makeover of all its U.S. restaurants by 2009 to feature specialty beverages such as coffee drinks, smoothies, energy drinks, and other bottled beverages.

Specialty drinks have higher profit margins than sandwiches, and McDonald’s estimates this “Made for You” campaign could boost sales by as much as $1 billion a year. Results from test markets in which the plan has already been tried suggest that it doesn’t require additional staff and that it doesn’t slow down service, but counters and drive-thru areas do have to be remodeled to make room for new equipment. Some franchisees are concerned about the costs of such renovations.

This has to be better news for McDonald’s investors and watchers than Moody’s downgrade of McDonald’s last week due in part to competition and labor and energy costs. Shares fell 54 cents, or 1.1 percent, to $54.26 after the Moody’s announcement, but closed Friday at $54. 47. On the other hand, a Goldman Sachs analyst has McDonald’s as a top pick in the otherwise mixed restaurant sector, for its global strength. Starbucks was downgraded last week as well.

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Filed under: Deals, Industry, Housing

Perhaps there are not enough good opportunities to “cherry pick” assets among U.S. mortgage lenders, so U.S. buyout firms Cerberus and JC Flowers have gotten approval to deal with the board of Northern Rock (LSE: NRK), the large and troubled U.K. mortgage bank.

The two funds would probably take different approaches. Flowers is interested in having Northern Rock continue to operate, but perhaps with many fewer employees. Cerberus is interest in the bank’s assets, which it believes it can get at a discount and then sell off to other institutions.

According to The Telegraph, British authorities “have said Northern Rock is solvent, but sources close to the restructuring warn that it is living on borrowed time.”

A buyout of Northern Rock could be a trial for whether similar deals could work in the U.S. There is little hope that the U.S. mortgage market will be better this year and may even stay depressed into 2008. Banks like Accredited Home Lenders (NASDAQ: LEND) are still not out of the woods. And, private equity and hedge fund interests may be the only buyers left for some of these companies.

Douglas A. McIntyre is a partner at 24/7 Wall St.

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