It might be time to take your nest egg off the table.
So many owners of mortgage banking firms have their entire net worth in their companies. They enjoyed the mini-boom of the past two years, but now, cash is hard to come by as the market turns again. They should look around and see what is happening. I see many companies selling either some or all of their servicing right now. After all, most of the cash from these sales goes right back into the company to make up for losses caused by dropping origination volume and rising transaction costs.
My advice? Consider selling the business and staying on. Or, take on a MSR line with the intent of issuing a dividend to yourself.
If these owners want to keep the ball up in the air then the first line of business should be to get to a zero-loss position. It’s as simple as that–live to fight another day.