With $50 Billion in Cash, is Buffett Preparing to Dine on Mortgage Industry?

“The bond market has seized up, stocks are in turmoil, private-equity funds are sidelined and hedge-fund managers and lenders are hosting fire sales.

These are happy days for Warren Buffett.” – WSJ, 8/21/07

Warren Buffet held back on buying financial services companies as the private equity firms drove up prices. Now with the credit crunch hitting even the largest lenders, Buffett is rumored to be considering buying even parts of Countrywide. Countrywide’s assets, including its debt-servicing business and its portfolio of high-quality mortgages and mortgage-backed securities, could be attractive to Berkshire.

Due diligence firms that value portfolios of loans could help with this process, such as First American’s Second Loan Outsourcing unit for home equity loans, and other firms that specialize in determining the health of mortgage loan pools.

Another one of the implications here is that purchased assets must be integrated in a complex, highly regulated business.  This requires industry knowledge, experience with process innovation, data normalization, compliance, analytics, and other methods and technologies.  Process flows, mortgage technology, and complex regulations must be mastered to improve the value of these ailing companies. Lean manufacturing techniques are just one of the areas where No World Borders provides value.

Michael F. Arrigo

Michael is Managing Partner & CEO of No World Borders, a leading healthcare management and IT consulting firm. He serves as an expert witness in Federal and State Court and was recently ruled as an expert by a 9th Circuit Federal Judge. He serves as a patent expert witness on intellectual property disputes, both as a Technical Expert and a Damages expert. He leads a team that provides Cybersecurity best practices for healthcare clients, ICD-10 Consulting, Meaningful Use of Electronic Health Records. He advises legal teams as an expert witness in HIPAA Privacy and Security, medical coding and billing and usual and customary cost of care, the Affordable Care Act and benefits enrollment, white collar crime, False Claims Act, Anti-Kickback, Stark Law, Insurance Fraud, payor-provider disputes, and consults to venture capital and private equity firms on mHealth, Cloud Computing in Healthcare, and Software as a Service. He advises self-insured employers on cost of care and regulations. Arrigo was recently retained by the U.S. Department of Justice (DOJ) regarding a significant false claims act investigation. He has provided opinions on over $1 billion in health care claims and due diligence on over $8 billion in healthcare mergers and acquisitions. Education: UC Irvine - Economics and Computer Science, University of Southern California - Business, studies at Stanford Medical School - Biomedical Informatics, studies at Harvard Medical School - Bioethics. Trained in over 10 medical specialties in medical billing and coding. Trained by U.S. Patent and Trademark Office (USPTO) and PTAB Judges on patent statutes, rules and case law (as a non-attorney to better advise clients on Technical and Damages aspects of patent construction and claims). Mr. Arrigo has been quoted in the Wall Street Journal, New York Times, and National Public Radio.

Leave a Reply