Mortgage Lender Implode-O-Meter

It seems that in every economic crisis there will always be some new idea that allows someone to benefit financially as the economy goes into a nose dive. The New York Times has a story about a new website called the Mortgage Lender Inplode Meter, the brain child of 28 year old Aaron Krowne, a former researcher at Emory University in Atlanta. To date 265 mortgage lenders have failed and gone out of business or suffered severe losses which have placed them on the watch list. Meanwhile, the sites advertising revenues are exploding. Damn, I guess I need to come up with something equally foresighted. Here are highlights from the NYT story:

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The misery in the housing market is registering on the Implode-O-Meter. As millions of homeowners fall behind on their mortgages, a fledgling Web site called the Mortgage Lender Implode-O-Meter is gleefully tallying the number of lenders that run into trouble too. On Monday, the count was 265 — and rising.

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The Implode-O-Meter is the brainchild of Aaron Krowne, a former researcher at Emory University in Atlanta. A computer scientist and mathematician, Mr. Krowne, 28, started the site in 2007, believing that the troubles in the housing market, and by extension the mortgage industry, would worsen. He was right — and the Implode-O-Meter took off. Traffic on the site soared, reaching as many as 100,000 regular visitors, and advertising dollars rolled in. Mr. Krowne quit his day job and hired 10 people for his company, Implode-Explode Heavy Industries.

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The tips usually come anonymously from employees at the troubled mortgage companies. Critics of the site say some of the tips have been more gossip than reality. But the Implode-O-Meter often posts the phone recordings and company e-mail to back up the bad news coming out of places like Merrill Lynch, which in March fired nearly everyone at First Franklin Financial, a business it purchased in 2006.

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The Implode-O-Meter, Mr. Krowne likes to say, has beat out the mainstream media time and again. Case in point, he says, was last October when it broke the news that Michael Jackson faced foreclosure on his Neverland property. Mr. Jackson’s representatives quickly denied the Implode-O-Meter’s story, which Mr. Krowne chalks up to his start-up status. His response? He posted the notice of Mr. Jackson’s defaults.

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“Every company thinks it is different,” Mr. Krowne says. He points to April last year as an example. Employees of SouthStar Funding, a mortgage company in Atlanta, bombarded him with phone calls at his day job, trying to persuade him that the company was fine after he placed it on his Ailing Lender list, he said. After all, the employees told him, they were being sent on a team-building trip to the Bahamas. Soon, Mr. Krowne said, he started getting threats from the company. When SouthStar folded, Mr. Krowne wrote: “I have to say that it is with genuine satisfaction that I post this report of SouthStar’s closure.”