Expert Witness & Consultant in FACTA, Banking, Management, Economics & Valuation

Consulting, Research, Advisory & Expert Witness Testimony Services - Including FACTA Expert Witness and Subprime Expert Witness Cases - Worldwide Since 1986

Practice Areas

A Primer on Subprime Mortgage Loans, Subprime Lenders, Alt-A Mortgage Loans, Alt-A Mortgage Lenders, Subprime Credit Cards, and Subprime Car Loans

It is universally desirable to own a home. Homeownership is the financial foundation of the economy, and the personal financial foundation of most people.

Several years ago, in order to increase the level of homeownership in the country, mortgage lenders began making mortgage loans to borrowers who had less than perfect credit histories or who were new to the credit market. Because of the increased risk present in these loans, they have been referred to as “subprime” mortgage loans.

Subprime mortgage loans refer to mortgage loans made to borrowers who have a less than prime credit condition. This less than prime credit condition may be due to a history of past credit or financial problems or simply be reflective of the fact that a person may be new to the world of credit and not have established a credit history.

Borrowers with credit scores of 600 and below (650 and below, by some definitions) often will find a subprime mortgage as their only source of mortgage financing. Late payment of bills or declaring bankruptcy could very well place borrowers in a situation where they can only qualify for a subprime mortgage. Accordingly, it is often advisable for people with low credit scores or temporary credit problems to wait for a period of time and build up their credit scores before applying for a mortgage in order to insure they are eligible for a conventional mortgage.

There are other factors that may cause a borrower to fall into the subprime category. For example, some borrowers might be classified as subprime despite having an excellent credit history because they choose not to provide the lender with the opportunity to verify their income or assets stated in the loan application process. Loans of this type are called “stated income” loans or "stated asset" (SISA) loans or "no income-no asset" (NINA) loans. Due to a subprime lender’s perceived higher risk in making these types of loans, the borrower is considered a subprime credit.

Subprime lenders generally regard subprime lending as a "numbers game" where they have to go through many prospective borrower applications in order to weed-out unacceptable risks and determine which applicants represent an acceptable level of risk. In order to deal with the large number of applications, subprime lenders often will use a credit scoring system to determine which applicants are acceptable risks and for which loan programs they may qualify.

In addition to using credit scoring programs to help them sort out the many applications that they receive for subprime loans, subprime lenders often make extensive use of television and Internet advertising to help bring in subprime loan applications. Also, subprime lenders buy lists of potential subprime borrowers and solicit their business by mail or over the Internet.

The reason that subprime lenders go to the trouble of examining large numbers of applications and determining which ones represent acceptable levels of risk is that subprime lenders charge higher interest rates and fees than those charged for non-subprime mortgage loans.

As of the first half of 2007, approximately 25% of mortgage originations in the United States are classified as subprime.
Subprime mortgage loans tend to have a shorter time horizon and fewer opportunities to refinance when interest rates fall than do traditional non-subprime loans.

Alt-A mortgage loans are considered to be of a higher quality than subprime mortgage loans but not as high quality as a prime mortgage loan that would qualify for sale to Fannie Mae or Freddie Mac. They can share many structural qualities with subprime loans, but the pricing of Alt-A loans is generally somewhat more favorable to a borrower than that of a subprime loan.

Examples of a typical Alt-A borrower would be one who has an acceptable credit rating but may have trouble verifying income, employment, or assets.

The greatest concern regarding subprime mortgages is that the vast majority of them are adjustable rate loans that start out with low "teaser" interest rates or low “teaser” monthly payment amounts that typically expire after the first year or two.

When this "teaser" period expires, the interest rate or payment amount can increase, often resulting in the subprime mortgage borrower being placed in the position of being unable to make the new monthly payments. The typical results are:

2. The subprime lender has to enter into a workout arrangement with the borrower which usually results in the subprime lender writing down the value of the loan on their books.

In either of these two possibilities, the subprime lender winds up with an investment value that is less than what was reflected on their books before the subprime loan went into default.

There are estimates that approximately $50 billion in subprime car loans were originated in 2006, the most recent year for which reliable information is available. This accounts for over 19% of all car loans originated during that period.

Subprime car loans include some features that make them as risky as subprime mortgage loans, and some features that make them less risky. For example, mortgage loans are secured by an asset that generally appreciates in value, whereas a car loan is secured by an asset that generally depreciates in value. On the other side of the ledger, mortgage loans are often repaid based upon a variable interest rate and variable payment amount; whereas car loans are more likely to be on a fixed rate and fixed payment amount.

Comparing subprime car loans to prime car loans, we find that subprime car loans are usually repaid over a longer term, require a lower down payment, and are made for a higher loan-to-value ratio than are prime car loans.

In the final analysis, it is believed that subprime car loans carry slightly less risk than do subprime mortgage loans since the retention of the car is often critical in order for the borrower to continue to work. Even so, there is always the possibility that the borrower could walk away from the car and subprime car loan and obtain transportation through another subprime car loan arrangement.

Many of the issues of subprime mortgage lending apply as well to subprime credit cards. Today, about 20% of the credit cards issued in the United States are considered to be of subprime quality.

Today, the credit card industry divides customers into the "prime" and "subprime" markets. Borrowers with a credit score in the top tier (and these tiers vary from lender to lender and are adjusted from time to time) may receive a credit card with a line of credit at an interest rate around 12%. Borrowers with a slightly lower credit score may receive a credit card with a line of credit at an interest rate of 15%, and a borrower with an even lower credit score may receive a credit card with a credit line at an interest rate around 17%. These are all considered non-subprime credit card customers.

Interest rates on subprime credit cards can be anywhere in a range from 20% to as high as 35% or so, depending upon the credit history of the borrower. In addition, lenders charge various fees, such as an annual fee and an account maintenance fee, to help offset their increased risk.

Subprime credit card lending began in the 1990s to allow subprime lenders to provide credit cards to customers with less than perfect credit and profit from the higher interest rates and fees that subprime lenders charge for these credit cards. The subprime credit card industry's market goal was to provide a credit card with a line of credit to customers with credit scores in the 500s, little or no credit history, those coming out of a personal bankruptcy and anyone else with a recent history of credit or financial problems.

Subprime credit cards offered to subprime borrowers typically require no security deposit, as do secured credit cards. Credit limits start out very low compared to those in the non-subprime credit card industry, typically in the $100 to $500 credit limit range.

Fees and interest rates are much higher than those for non-subprime credit cards. Likewise, the effect of some terms can be magnified due to the small credit line size. For example, take an overlimit fee of $29.00. This fee is of course a much greater percentage for a subprime credit card line of $500 than it would be for a non-subprime credit card of $5,000.

With these greater rewards for subprime credit card lenders come greater risks. It is reported that subprime credit card companies are writing off losses in the 15% to 17% range versus the average industry loss rate of 6.5%, according to CardWeb; and delinquency rates for subprime card companies average around 10% while those for the rest of the lending industry average around 5%.

Subprime credit card issuers use mass marketing techniques to bring in customers. Mail and Internet new account solicitations exceeded 5 billion in 2006, and were up dramatically from the total in 2005.

Those with the lowest credit scores and histories may still qualify for a secured subprime credit card. Essentially, even though a secured subprime credit card looks and, in terms of making purchases, acts like a regular credit card, it is basically a pre-paid card wherein the customer makes a "security deposit" to insure the payment of charges made with the secured subprime credit card.

Actually, the term "subprime" is typically not included in the term of art when discussing secured credit cards; but make no mistake about it, one only has to take a look at the terms of a secured credit card to see that it is a subprime credit card. Typical secured credit card terms include a hefty (in relation to the “credit line”) annual fee and require a minimum deposit of from $99 up to $5,000 depending upon the size of the “credit line” granted.

Despite their onerous terms, often a secured credit card is used as the first step for someone who needs to reestablish their credit.

Debit cards carry the Visa or MasterCard name and give you the privilege of seeing money fly out of your checking account as soon as you make a purchase. In this way, a debit card is similar to a secured credit card except that the secured credit card essentially pays for purchases from the deposit you made earlier.

Managing a debit card that really does not offer you any credit, and coordinating all of the purchases that you make with your debit card with all of the checks that you write is a management nightmare.

Banks love debit cards because they eliminate the float that customers generally enjoy between the time a purchase is made and the time that the purchase has to be paid for, i.e., when you pay your credit card bill.

About the Author - Expert Witness Consultant Don Coker
Mr. Coker provides expert consultation, fact examination and analysis, advice, Affidavits, Declarations, reports, and sworn testimony at deposition and in court for parties engaged in litigation involving subprime mortgage lending, Alt-A mortgage lending, subprime car loans, subprime credit cards, and all areas of banking and finance.

Mr. Coker's expert witness experience and background includes over 365 cases for plaintiffs and defendants nationwide, 93 testimonies, and 10 courthouse settlements in all areas of banking, finance, FACTA issues, real estate, economic damages, identity theft, business valuation, intangible asset valuation, and many related matters going back to 1989. He is privileged to be listed in the databases of recommended expert witness consultants of both the Defense Research Institute and the American Association of Justice.

His clients have included 8 of the top 10 banks in the country, 27 of the country’s top 250 law firms, and numerous governmental clients including many banking regulators (FDIC, RTC, FSLIC, and others), IRS, USAID, U.S. Air Force, State of New York, State of Texas, World Bank, International Accounting Standards Board, and hundreds of others.

Mr. Coker's employment experience includes Citicorp and entities that are now JPMorgan Chase Bank, Bank of America, and Regions Financial, as well as Ford Motor Credit and a two-year stint as a high-level governmental financial institution regulator.

Mr. Coker holds a B.A. degree from the University of Alabama, and completed postgraduate education at Alabama, the University of Houston, Southern Methodist University, Spring Hill College, and the Harvard Business School.

In addition to subprime mortgage and subprime credit card litigation consulting and other banking and finance-related litigation consulting, Mr. Coker provides consulting services in many additional areas including business valuations, business plan writing, feasibility studies, marketing studies, anti-money laundering policies and procedures, policy and procedure manuals for financial institutions and other businesses, merger and acquisition due diligence and assistance, research, and many other related areas.

As part of his wide-ranging consulting activities, Mr. Coker has been called on by clients in 22 countries for work assignments involving over 50 countries.

Mr. Coker is widely published on banking and financial subjects, and is often sought out by the media for interviews and comments.

Mr. Coker serves clients worldwide from his office in the metro Atlanta, Georgia USA area.

The Facts on FACTA: A Note Regarding Current FACTA Litigation and FACTA Expert Witness Consulting

The United States Congress passed the Fair and Accurate Credit Transactions Act (commonly referred to as the FACT Act or FACTA); and FACTA was signed into law on December 4, 2003, and went into full effect on December 4, 2006. An important part of FACTA deals with the truncation of personal confidential financial information from printed credit card receipts. FACTA requires the truncation or masking of all of the credit card account number except for no more than the last five digits and the truncation or masking of the entire credit card expiration date. The vast majority of retailers do comply with FACTA and show on their printed credit card receipts only the last four digits of the credit card account number and none of the expiration date.

It is an inexplicable and unfortunate fact that many retailers willfully have chosen to ignore the clear credit card receipt account number and expiration date truncation requirements of FACTA and therefore needlessly subject their customers to the possibility of becoming identity theft victims.

Even though it is a proven fact that the costs of compliance with FACTA's credit card account number and expiration date truncation requirements are small, the possible resulting damages to a customer who becomes an identity theft victim due to a retailer willfully ignoring the requirements of FACTA are huge.

Likewise, it is in the best economic interests of retailers to make sure that their IT systems are set up to issue credit card receipts that comply with the credit card account number and expiration date truncation requirements of FACTA. Mr. Coker is available to consult with retailers and IT companies who need assistance in modifying their IT systems so that the credit card receipts they issue conform to the requirements of FACTA.

Mr. Coker provides FACTA expert witness services, consultation, examination and analysis of the facts of a case, advice, Declarations, reports, and sworn testimony in deposition and court for parties engaged in FACTA litigation.

Mr. Coker's employment experience includes Citicorp and entities that are now JPMorgan Chase Bank, Bank of America, and Regions Financial, as well as a two-year stint as a high-level governmental financial institution regulator.

In addition to FACTA litigation and other banking and finance-related litigation consulting, Mr. Coker provides consulting services in many additional areas including business valuations, business plan writing, feasibility studies, marketing studies, anti-money laundering policies and procedures, policy and procedure manuals for financial institutions and other businesses, merger and acquisition due diligence and assistance, research, international matters, and many other related areas.

The Fair and Accurate Credit Transaction Act (“FACTA”) was passed by Congress and signed into law on December 4, 2003, and became fully effective on December 4, 2006. The purpose of FACTA is to reduce the amount of personal confidential financial information that is generated and thereby reduce the incidence of identity theft and credit card fraud. In keeping with this goal, 15 USC 1681c(g)(1) requires that merchants that issue receipts to individuals truncate all but the last four or five digits of the customer’s credit card account number and truncate the entire expiration date.

Unfortunately, and despite the fact that FACTA was widely discussed before and after its passage, many merchants simply have ignored these aspects of FACTA, apparently based upon their belief that expiration dates are unimportant to a criminal. They are wrong. Credit card expiration dates are very important and useful to criminals. Consider the following:

● Expiration dates are one of the inputs needed to calculate the 3-digit security code (Visa = CVV2 or CVC 2 = MasterCard) on the back of a credit card.

● Expiration dates are required for some, but not all, online purchases, as clearly demonstrated by my recent online test purchase at Wal-Mart, the world’s largest retailer.

● Expiration dates combined with the last four or five digits of an account number can be used to bolster the credibility of a criminal who is making pretext calls to a card holder in order to learn other personal confidential financial information.

● Expiration dates are one of the personal confidential financial information items trafficked in by criminals.

● Expiration dates are one of the items contained in the magnetic stripe of a credit card, so it is useful to a criminal when creating a phony duplicate card.

● Expiration dates are easy to exclude from receipts and involve minimal expense, even for a major retailer with hundreds of stores and cash registers.

● Expiration dates are required to be excluded from printed receipts, according to Visa’s Rules for Merchants, which predates FACTA.

● Expiration dates are required to be excluded from printed receipts, according to MasterCard International’s Rules, which predates FACTA.

● Expiration dates are required to be excluded from printed receipts given to individuals, according to laws passed or introduced in at least thirty-four states.

● Expiration dates are required to be excluded from printed receipts given to individuals, according to FACTA.

The costs for a merchant to implement FACTA are small, but the potential losses to individuals from identity theft and credit card fraud are great. Accordingly, it is difficult to see how any merchant could fail to see the risk of harm to which they willfully are exposing their customers by not truncating expiration dates as required by FACTA as well as Visa and MasterCard International merchant rules as well as many state laws.
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Don Coker is an experienced banking expert witness consultant who has worked on over 365 cases nationwide and testified 93 times. He is a former banker and banking regulator, widely published, and often quoted in the media. He is available to discuss FACTA, subprime and other banking, finance, economic and credit damages, fraud and embezzlement, real estate, business valuation, and related cases with attorneys. Mr. Coker is located in Atlanta, GA, and can be reached at Bankexpert@cs.com or (770) 852-2286.

The following section provides Mr. Coker's qualifications and areas of expertise, experience, and interest.

Banking Expert Witness, Management Expert, and Economic Consultant keywords and and areas of expertise for Don Coker include Banking Expert Witness, Bank Consultant, Banking Industry Standards Expert Witness, Bank Expert Witness, Fair and Accurate Credit Transactions Act - FACTA Expert Witness Consultant, Subprime Expert Witness Consultant, Commercial Reasonableness Expert Witness, Duty of Care Expert Witness, Fiduciary Duty Expert Witness, Good Faith Expert Witness, Honest in Fact Expert Witness, Bank Accounts Expert Witness, Bankruptcy Preference Expert Witness, Anti-Money Laundering, FACTA Compliance Consulting, AML, Refco, Parmalat, Credit Damage Expert Witness, Finance, Business Valuation, Asset Appraisal, Intellectual Capital Appraisal, Core Deposit Intangible Valuation, Intangible Asset Valuation, Intellectual Capital, Class Action, Fairness Opinions, Solvency Opinions, Valuation, Economics, Fraud Expert Witness, Embezzlement, Checking Accounts, Credit Card Fraud Expert Witness, Credit Reports, Discounted Cash Flow Analysis, Identity Theft Expert Witness, Wire Transfer Expert Witness, Mortgages, Investments, Securities, Loans, Home Improvement Loans, Economic Damages Expert Witness, Lost Wages, Real Estate Consultant, Commercial Real Estate Feasibility, Hotel Feasibility, Hospital Feasibility, Medical Economics, International Business, Lender Liability, Financial Statements, Money Laundering Expert Witness, Trusts, Estates, Feasibility Studies, Corporate Intelligence, Financial Research, Economic Research, White Collar Crime, Due Diligence, Investment Banking, Mergers & Acquisitions, Corporate Debt Restructuring, Interim Manager, Turnaround Manager, Corporate Governance, Ethics, Truth in Lending Act, HOEPA, Class Action, Savings and Loan Industry Standards, Commercial Arbitration Neutral, Mediation Neutral, and Expert Witness Services.

- Since 1986, Don Coker has provided a broad array of consulting services for clients worldwide in the fields of banking, interim management, finance, economics, management, business valuation, accounting, corporate finance, merger and acquisition assistance, due diligence, tangible and intangible asset valuation, feasibility studies, business plans, marketing, and commercial and residential real estate.
- Clients in 45 states and over 22 foreign countries include many domestic and foreign governmental entities and agencies, law firms, financial institutions, corporations, healthcare entities, organizations, and others.
- Mr. Coker has been engaged many times as a banking expert for governmental entities including the FDIC, RTC, IRS, Federal Home Loan Bank, FSLIC, Federal Reserve Bank, U.S. Agency for International Development, and others.
- In addition, Mr. Coker has been engaged by over 50 banks worldwide including Bank of America, Bank One, Citigroup, Wachovia Bank, First Union Bank, SouthTrust Bank, JPMorgan Chase Bank, U.S. Bancorp, Wells Fargo, National City (Bank) Corp., MBNA America Bank, Citizens Bank of PA, Washington Mutual, The Provident Bank, The World Bank, Banco Industrial de Venezuela, Banco Bilbao Vizcaya Argentaria, Bank of Tanzania (central bank), and Bancomer (Mexico).
- Mr. Coker assists attorneys representing both Plaintiffs and Defendants in litigation matters.
- Previous work experience includes over twenty years in virtually all aspects of high-level management in the financial services industry including working as a governmental financial institution regulator and executive positions in banking, savings and loans, credit companies, mortgage banking, and banks engaged in trust, estate, and probate administration.
- Mr. Coker serves the consulting and expert witness needs of his clients worldwide from his office in the northern metro Atlanta, Georgia area.

- Business plan preparation and advice for new and expanding businesses.
- Asset valuation, including portfolios of financial assets.
- Business valuation.
- Business management advice.
- Corporate financial structuring and restructuring.
- Merger and acquisition advice and due diligence.
- Intangible asset appraisal.
- Training of banking, business, and governmental leaders worldwide.

Expert Witness assistance for attorneys representing both Plaintiffs and Defendants involved in cases covering virtually all areas of banking, checking account operations, deposit operations, lending operations, FACTA, subprime finance, credit card operations, finance, economics, management, business valuation, asset valuation, intangible asset valuation, and commercial and residential real estate, such as:

- Banking industry standards and practices.
- Banking policies and procedures.
- Banking employment matters.
- Bankruptcy preference matters.
- FACTA - Fair and Accurate Credit Transactions Act matters.
- Financial institution officer and director liability.
- Check Cashing.
- Checking account administration.
- Check fraud.
- Checking account administration.
- Commercial reasonableness.
- Credit card fraud.
- Credit card account number and expiration date truncation compliance.
- Credit card operations and procedures.
- Credit damage.
- Credit reports.
- Duty of care.
- Economic damages.
- Ethics in Banking and Business.
- FACTA issues.
- Fiduciary duty.
- Financial calculations.
- Good faith.
- Honesty in fact.
- Identity theft.
- Lender liability.
- Mortgage issues.
- Bank trust department, estate, trust, and probate issues.
- Business valuation issues.
- Investment management performance issues.
- Option Arm Issues
- Payday Lending.
- Reasonableness.
- Securities and investments - (Example: Logged 500 hours examining Refco's files, policies & procedures, etc., for ten municipalities who successfully sued Refco.)
- Subprime loans, subprime credit cards, subprime mortgages.
- Transfer pricing.
- Wire transfers.
- International funds transfers.
- International transactions.
- Money laundering.
- Russian transactions.
- Repossessions and foreclosures.
- Asset valuation.
- Business valuation.
- Intangible asset valuation.
- Royalty valuation.
- Licensing valuation.

- Interim management assignments have included two challenging CEO-type troubled financial institution turnaround assignments for the governmental financial institution regulators.
- Additional interim management engagements have included several governmental financial institution regulatory oversight management jobs at troubled financial institutions.
- Interim, Turnaround Specialist, Project, Temporary, Restructuring, and Crisis Management services available worldwide on short notice.
- New interim management and turnaround engagements (as CEO, only) are considered for all business types worldwide.

- International business valuation.
- International feasibility studies.
- International marketing studies.
- International business development.
- Assistance in international transactions.
- Expert witness consulting involving international matters.
- Assistance in establishing new offices in any foreign country.
- International site selection and acquisition assistance.
- International transfer pricing issues.
- Interim & turnaround management services available worldwide on short notice.
- International Financial Reporting Standards.
- Other consultants around the world are available to assist as needed in any international consulting matters.

- Systems Analysis and Improvement
- Portfolio Analysis and Valuation
- Due Diligence for Acquisitions, Transactions, etc.
- Merger Integration Analysis and Assistance
- Core Deposit Intangible Analysis
- Intangible Asset Valuations
- Bank Valuations
- Bank Branch Sales and Valuations

- Business Valuation
- Valuation of Parts of a Business
- Intellectual Capital Evaluations
- Management Consulting
- Fairness Opinions
- Corporate Financing Assistance
- Business Ethics
- Interim Management
- Real Options Theory Analysis
- Business Plans
- Feasibility and Marketing Studies
- Due Diligence for Acquisitions, Transactions, etc.
- Corporate Competitive Intelligence & Data Analysis
- Interim Management Services
- Turnaround Management Services

- Intellectual Capital Valuations
- Professional Practice Valuations
- Economic Damages Estimates: Lost Wages, Lost Profits, etc.
- Valuations of stock, intangible assets such as contracts, and special assets
- Valuation of Partnership Interests
- Royalty Valuation.
- Licensing Valuation.

- Commercial, Multi-Family, Hospitality, and Development Matters, including Finance
- Marketing, Feasibility and Absorption Studies
- Ad Valorem Tax Assistance for Commercial Real Estate - Defining the portion of value attributable to superior management, reputation of owner/manager, brand name, and similar factors
- Valuation of Partnership Interests

- Due Diligence for Foreign Market Entry or Expansion
- Consulting Advice for Foreign Corporations Wanting to Enter the U.S. Market
- Foreign Investment of Foreign Generated Profits
- U.S. Investment of Funds of Foreign Corporations
- International Corporate Acquisition and Divestiture
- International Real Estate Acquisition and Divestiture
- International Site Selection and Acquisition
- International Transfer Pricing Analysis
- Trade - Finding and arranging purchases and sales of resources and products
- Marketing - Design and implementation of international marketing plans
- Marketing Consulting for Foreign Entities Doing Business in the U.S.

- Professional Practice Evaluation
- Analysis of Practice and Business Combinations
- Analysis and Improvement of Work Processes
- Medical Office Building Assistance

- Site Selection and Acquisition Worldwide
- Feasibility Studies
- Franchise Acquisition Assistance
- Quality-check Programs
- Property Valuation

- Market Research and Studies
- Brand Name Analysis and Valuation
- Product Name Studies
- Quality-check Programs

- Arbitration and Mediation of Business, Financial, Economic, and Real Estate Issues
- Business Ethics Issues

- Litigation Assistance and Support in the areas cited in this web-site
- Work with either plaintiff or defendant
- Issues Assessments
- Damages Estimates: Lost Wages, Lost Profits, etc.
- Settlement Advice.
- Advice, Reports, Affidavits, Declarations, Calculations, Depositions, and Courtroom Testimony, if necessary

- Consultation, reports, research, analysis, feasibility studies, statistical sampling, opinions of compliance with industry standards, financial calculations, file review, portfolio review, due diligence, investment banking transaction assistance, tangible and intangible asset valuation, business valuation, ethics opinions, management oversight, complex litigation assistance and support including deposition and courtroom testimony, writing and answering interrogatories, and preparation of attorneys and witnesses for deposition and trial.

- Expert witness case assignments involving the review of a large amount of data are common.
- Some case assignments have involved the review of over forty file boxes of information.
- No case less than 16 hours is accepted.

- Expert Witness Assignments: Billed based upon an hourly rate plus hard expense reimbursement.
- Consulting Assignments: Each assignment is individually priced to suit the assignment and the client's needs. Typically, consulting assignments are priced based upon a pre-agreed fixed charge paid in advance or in stages, depending upon the nature of the assignment.
- Transactional Assignments: Certain other assignments, generally transaction-based, are priced as a percentage of the value of the service performed.
- A nonrefundable retainer is standard.
- Often, billed travel time is capped in order to help a client control costs.
- Travel worldwide is acceptable.
- All assignments are memorialized with a one-page front-and-back Consulting Agreement.
- Generally, fees and charges are due in advance.

Profile of Banking Expert Witness Consultant

Note:
Please skip down to the Curriculum Vitae and Representative Client List that follows this Key Word section.
Thank you.

Appraisal Areas:
Accounting Practice Appraisal
Bank Appraisal
Bank Branch Appraisal
Business Appraisal
Business Evaluation
Business Valuation
Clinic Appraisal
Closely-Held Business Appraisal
Collateral Appraisal
Contract Appraisal
Core Deposits
Core Deposit Intangible Appraisal
Corporation Appraisal
Damages Appraisal
Dental Practice Appraisal
Discount Rate
Discounted Cash Flow Analysis
Economic Value Appraisal
Evaluation
Fair Market Value
Fair Value
Fairness Opinion
Financial Institution Appraisal
Frictional Cash
Health Maintenance Organization Appraisal
HMO Appraisal
Hospital Valuation
Hotel Valuation
Intangible Asset Appraisal
Intangible Assets
Intangibles
Intellectual Capital Appraisal
Law Practice Appraisal
License Valuation
Loan Portfolio Appraisal
Medical Practice Appraisal
Mortality Table
Mortgage Appraisal
Mortgage Portfolio Appraisal
Mortgage Servicing Contract Appraisal
Nostro Account
Note Appraisal
Portfolio Appraisal
Professional Practice Appraisal
Partnership Interest Appraisal
Reasonableness of Appraisals
Relief from Royalty Approach to Value
Reserve Cash
Royalty Valuation
Savings and Loan Appraisal
Securities Appraisal
Stock Appraisal
Strategic Cash
Subprime Loan Appraisal Valuation
Subprime Mortgage Appraisal Valuation
Valuation

Banking Issues:
Accounts Receivable Financing
Acquisition Loans
Acquisition and Development Loans
Add-On Interest
Adjustable Rate Loans
Adjustable Rate Mortgages
Alt-A Credit
Alt-A Loans
Alt-A Mortgages
Affordable Mortgages
American Express
American Express Merchant Rules
Annunzio-Wylie Anti-Money Laundering Act
Anti-Money Laundering Policies and Procedures
Apartment Loans
ARMs
Asset Based Lending
Asset and Liability Management
Asset Sales
Assignment
ATM - Automated Teller Machine
Automobile Loans
B & C Credit
B & C Loans
B and C Credit
B and C Loans
Bad Debts
Bank Charter Applications
Bank Branch Applications
Bank Acquisitions
Bank Administration
Bank Branch Acquisitions
Bank Branch Operations
Bank Branches
Bank Fees
Bank Holding Companies
Bank Lending
Bank Management
Bank Mergers
Bank Officers
Bank Operations
Bank Regulators
Banking
Banking Ethics
Banking Industry Practices
Banking Industry Standards and Practices
Banking Industry Standards of Care
Banking Regulations
Banking Regulators
Bank Board of Directors
Bank Boards
Bank Ethics
Bank Financial Statements
Bank Fraud
Bank Policy & Procedure Manuals
Bank Secrecy Act
Bank Taxes
Bank Teller
Bank Teller Manual
Bank Teller Operations
Bank Teller Training
Banking Ethics
Bankruptcy Preference
Bankruptcy Remote Special Purpose Entity
Banks
Beacon Score
Board of Directors
Bonds
Business
Business Finance
Business Loans
Capital
Capital Lease
Captive Insurance
Captive Reinsurance
Car Loans
Cash
Cash Flow
Cash Management
CDO
CEBA
Checks
Check Cashing
Check Cashing Companies
Check Paying
Check Forgery
Check Fraud
Check Processing
Check Truncation
Checking Accounts
Checking Account Fraud
Churning
CMBS
CMO
Coin and Currency
Collateralized Debt Obligation Valuation
Collateralized Debt Obligations
Collateralized Mortgage Backed Securities
Collateralized Mortgage Obligation
Commercial Mortgage Backed Securities
Commercial Mortgages
Commercial Real Estate
Commercial Real Estate Finance
Commercial Real Estate Loans
Commercial Real Estate Mortgages
Commercial Reasonableness
Commercially Reasonable
Competitive Equality Banking Act
Computer Issues in Banking
Condominium Loans
Construction Loans
Consumer Finance
Consumer Loans
Core Deposits
Corporate Finance
Corporate Resolution
Corporations
CRA - Community Reinvestment Act
Credit
Credit Analysis
Credit Card Merchant
Credit Card Merchant Account
Credit Card Merchant Rules
Credit Card
Credit Card Account Number Truncation
Credit Card Expiration Date
Credit Card Expiration Date Masking
Credit Card Expiration Date Truncation
Credit Card Operations
Credit Card Receipt
Credit Card Receipt Masking
Credit Card Receipt Truncation
Credit Lines
Credit Bureaus
Credit Companies
Credit Problems
Credit Report
Credit Score
Credit Union
Currency
Currency and Foreign Transactions Reporting Act
Currency Transaction Report
Dealer Finance
Debit Card
Debt
Debt Restructuring
Deed of Trust
Depository Bank
Derivatives
Development Loans
Diners Club
Direct Lending
Director and Officer Liability
Director and Officer Responsibilities
Discover Card
Discover Card Merchant Rules
Drawee
Drawer
Due Diligence
Duty of Care
Elder Financial Abuse
Elder Financial Exploitation
Embezzlement
Endorsement
Equipment Loans
Equity Stripping
Estate
Estate Administration
Expedited Funds Availability Act of 1987
Expiration Date Masking
Expiration Date Truncation
FACT Act
FACTA
Fair and Accurate Credit Transactions Act, 15 USC 1681
Fair Credit Reporting Act of 1970
Fair Dealing
Fair Debt Collection Practices Act of 1977
Fannie Mae
FDIC
FDIC Regulations
Federal Deposit Insurance Corporation
Federal Home Loan Bank Regulations
Federal Home Loan Mortgage Corp.
Federal National Mortgage Association
Federal Reserve Bank Regulations
Fedwire
FF&E Loans
FHA Loans
FHA Title I Loans
FHLMC
FICO Score
Fiduciary
Finance
Finance Companies
Financial Abuse of the Elderly
Financial Calculations
Financial Ethics
Financial Institution Regulators
Financial Institution Taxes
Financial Institutions
Financial Management
Financial Services Industry
Financial Statement Fraud
Financial Statements
Financial Strategy
Financial Privacy
Financial Institutions Reform, Recovery, and Enforcement Act
FIRREA
Fixed Rate Loans
Fixed Rate Mortgages
Flood Insurance
FNMA
Force Placed Insurance
Force Placed Policy
Foreclosure
Forensic Funds Tracing
Forged Endorsement
Forgery
Fraud
Fraudulent Conveyance
Freddie Mac
Full Data Card
Full Info Card
Funds
Funds Tracing
Funds Transfers
Gap Loans
Ginnie Mae
Good Faith
Government National Mortgage Association
Gramm-Leach-Bliley Act of 1999
Hacker
Hedge
Hedging
HOEPA
Holder in Due Course
Home Improvement Loans
Home Loans
Home Mortgages
Home Owners Equity Protection Act
Homeowners Insurance
Hotel Loans
Hotel Mortgages
Hurricane Damages
Hurricane Damage Mortgage Loan Issues
Hurricane Katrina
Hurricane Rita
Identity Theft
Improper Foreclosure
Indirect Lending
Insolvent Financial Institutions
Insurance Fraud
Interchange Fees
Interest
Interest Calculation
Interest Rate Reset
Interest Rate Swaps
Interest Rates
Internal Revenue Service
International Finance
International Loans
Inventory Financing
Inventory Loans
Investing
Investment
Investment Banking
Investment Finance
Investments
IRS
Joint Ventures
Katrina Damages
Katrina Insurance Issues
Katrina Lender Issues
Katrina Mortgage Loan Issues
Kickbacks
Lender Liability
Lender Placed Insurance
Lender Placed Policy
Lending Bias
Lending Standards
Letter of Credit
Line of Credit
Litigation
Litigation Tracking Shares
Litigation Tracking Warrants
Loan Amortization
Loan Assumptions
Loan Collections
Loan Commitments
Loan Companies
Loan Delinquency
Loan Extensions
Loan Fees
Loan Foreclosure
Loan Fraud
Loan Participations
Loan Sales
Loan Servicing
Loan Terms
Loan Underwriting
Loan Workouts
Loans
LPI
LPP
MAC Clause
Mask Credit Card Expiration Date
Mask Credit Card Number
MasterCard
MasterCard International
MasterCard Merchant Rules
Material Adverse Change
Merchant Account
Merchant Agreement
Misapplication of Loan Funds
Misrepresentation of Financial Condition
Money
Money Laundering
Money Laundering Control Act of 1986
Money Laundering Suppression Act of 1994
Money Lending
Money Services Business
Mortgage Backed Securities
Mortgage Banker
Mortgage Banking
Mortgage Broker
Mortgage Brokerage
Mortgage Insurance
Mortgage Loans
Mortgage Sales
Mortgages
Net Present Value
NINA
No Income, No Assets
Present Value
Office Building Loans
Operating Lease
Option ARM Loans
Ordinary Care
Partnership Resolution
Patriot Act
Pay Day Loans
Payday Loans
Payee
Payer
Payment Reset
Personnel Performance Issues and Standards in Financial Services Industries
PMI
Policy & Procedure Manuals
Predatory Lending
Private Mortgage Insurance
Professional Liability - Attorneys in Banking
Professional Liability - Accountants in Banking
Professional Liability - Real Estate Appraisers in Banking
Proper Assignment
Prudent Man Rule
Real Estate
Real Estate Broker
Real Estate Finance
Real Estate Investment Trusts
Real Estate Investments
Real Estate Joint Ventures
Real Estate Mortgages
Real Estate Mortgage Investment Conduit
Real Estate Partnerships
Real Estate Sales
Real Estate Securities
Real Estate Settlement Procedures Act of 1974
Real Estate Syndications
Real Estate Title Insurance
Reassignment
Reasonable Commercial Standards
Reasonable Fees
Reg CC
Regulation CC
Regulatory Policies and Procedures
REMIC
Repossession
Reset
Residential Real Estate Loans
Resolution
Right to Financial Privacy Act of 1978
RTC - Resolution Trust Corporation
Safety and Soundness
Sale of Resolution Trust Corp. Assets
Sale of RTC Assets
Savings Accounts
Savings and Loan Association
Savings and Loan Regulations
Savings and Loan Regulators
SBA
Second Mortgages
Secondary Marketing
Secondary Mortgage Market
Securitized Transactions
SISA
Small Business Administration
Small Business Finance
Small Business Loans
Society for Worldwide Interbank Financial Telecommunications
SPEs
Special Purpose Acquisition Company (SPAC)
Special Purpose Entities (SPE)
Stand-By Loans
Stated Income, Stated Assets
Stock Broker
Stock Loans
Stocks
Subdivision Loans
Subprime
Subprime Adjustable Rate Loan
Subprime Adjustable Rate Mortgage
Subprime ARM
Subprime Borrower
Subprime Car Loan
Subprime Credit Card Underwriting
Subprime Credit Cards
Subprime Fixed Rate Loan
Subprime Fixed Rate Mortgage
Subprime Lender
Subprime Loan Underwriting
Subprime Loans
Subprime Mortgage
Subprime Mortgage Market
Subprime Mortgage Interest Rate Reset
Subprime Mortgage Payment Reset
Subprime Mortgage Underwriting
Subprime Portfolio Valuation
Subprime Problems
Swaps
SWIFT
TDR
Teller
Teller Operations
Thrift Institutions
Time Value of Money
Title Insurance
Transaction Reconstruction & Analysis
Troubled Financial Institutions
Troubled Debt Refinancing
Troubled Debt Restructuring
Truncation
Truncation of Credit Card Expiration Date
Truncation of Credit Card Number
Truncation of Expiration Date
Trust Administration
Trust Deeds
Trust Department Issues
Trustee
Trusts
Truth in Lending Act
Truth in Savings Act
Underwriting
Unreasonable Fees
USA Patriot Act
Usury
VA Loans
Vehicle Loans
Vendor's Lien Loans
Visa
Visa Card
Visa Card Merchant Rules
Visa Merchant Rules
Warehouse Credit Lines
Warehouse Loans
White Collar Crime
Willful
Willful Violation
Wire Transfers
Working Capital Loans
Workouts
Wrongful Foreclosure
Yield
Yield Spread
Yield Spread Premium

Damages:
Business Damages
Credit Damage
Damages
Damages Appraisal
Damages Estimates
Economic Damages
Economic Evaluation
Economic Valuation
Economics
Human Life Valuation
Hurricane Damages
Hurricane Katrina Damages
Hurricane Rita Damages
Identity Theft
Impaired Earnings
Loss of Life
Lost Earnings
Lost Income
Lost Profits
Lost Wages Estimates
Personal Injury Damages

Bankruptcy Preference Cases:
Ordinary Course Defense
Ordinary Course Exception
Ordinary Course of Business
Preference Period
Pre-Preference Period
Prepreference Period
Preferential Payments

Other Areas:
Accounting Fraud
Arbitration
Arbitration Neutral
Arbitrator
Business Ecosystem Analysis
Business Ecosystem Development
Business Manager
Business Plan
Business Plan Preparation
Business Plans
Business Process Analysis
Change Management
Class Action
Class Certification
Class Decertification
Commercial Arbitration Neutral
Commercial Mediation Neutral
Continuous Improvement
Crisis CEO Manager
Crisis Management
Crisis Manager
Decision Making
Economic Analysis
Economic Development
Economic Substance Doctrine
Economist
Ethics
Extraordinary Commissioner for Patmalat
Fairness Opinion
Feasibility Studies
Financial Ethics
Foreign Trade
Identity Theft
Intellectual Capital Issues
Interim CEO
Interim Management
Interim Manager
International Investment
International Transactions
International Site Selection
International Trade
Management Consulting
Marketing Studies
Mediation
Mediation Neutral
Mediator
Medical Economics
Neutral
Office Startup Costs Estimates
Parmalat
Pareto Analysis
Political Analysis
Privatization
Project Management
Project Manager
Real Options Theory Analysis
Refco
Refco Bankruptcy
Refco Finance, Inc.
Refco Group Holdings
Refco, Inc.
Refco Operations
Refco Securities, Inc.
Regulatory Oversight
Research
Research - Banking
Research - Business
Research - Corporate
Research - Corporate Intelligence
Research - Credit
Research - Economic
Research - Feasibility
Research - Financial
Research - General
Research - International Subjects
Research - Political Subjects
Root Cause Analysis
Securities Lawsuits
Securities Suits
Site Selection
Solvency Opinion
Temporary CEO
Temporary Management
Temporary Manager
Transfer Pricing
Turnaround Management
Turnaround Manager

FACTA Key Words:
15 USC 1681
15 USC 1681c
15 USC 1681c (g)
15 USC 1681c (n)
15 USC 1681n
Arizona credit card truncation, 44-1367
Arkansas credit card truncation, HB 1269
California credit card truncation, Civil-747
Colorado credit card truncation, HB 02-144
Delaware credit card truncation, SB 11
Florida credit card truncation, Bill No. 20, Bill # 20
Georgia credit card truncation, HB 213
Idaho credit card truncation, HB 134
Illinois credit card truncation, HB 259
Kansas credit card truncation, HB 2676
Kentucky credit card truncation, HB 70
Louisiana credit card truncation, Act 584
Maine credit card truncation, LD 1880
Maryland credit card truncation, SB 25
Michigan credit card truncation, Bill No. 5435, Bill # 5435
Minnesota credit card truncation, SB 506
Missouri credit card truncation, SB 292
Nebraska credit card truncation, HB 276
Nevada credit card truncation, SB 297
New Jersey credit card truncation, S 1149
New Mexico credit card truncation, SB 253
New York credit card truncation, A 5973
North Carolina credit card truncation, HB 357
North Dakota credit card truncation, SB 2037
Ohio credit card truncation, Bill No. 250, Bill # 250
Oklahoma credit card truncation, SB 931
Oregon credit card truncation, HB 2103
Pennsylvania credit card truncation, Bill No. 348, Bill # 348
Rhode Island credit card truncation, S 2031
Texas credit card truncation, SB 235
Utah credit card truncation, SB 6
Virginia credit card truncation, SB 140
Washington credit card truncation, HB 2410
Wisconsin credit card truncation, Bill No. 365, Bill # 365

Previous URLs:
http://firms.findlaw.com/Bankexpert/
http://firms.findlaw.com/CheckFraud/
http://firms.findlaw.com/BusinessValuation/
http://firms.findlaw.com/BusinessPlans/
http://home.talkcity.com/PresidioDr/bankexpert/DonCoker.html

This loan program is an adjustable rate mortgage with added flexibility of making one of several possible payments on your mortgage every month, in order to better manage your monthly cash flow.

It's low introductory start rate allows you to make very low initial mortgage payments and low qualifying rates enable you to qualify for more home.

The minimum payment option can help keep your monthly payments affordable. If the minimum monthly payment is not sufficient to pay the monthly interest due, you can always avoid deferred interest by choosing the interest-only payment option.

With the Option ARM, you generally have at least two fully amortized payment choices, leading to a quicker loan payoff. If you prefer to pay off your loan on schedule, you can make the fully amortized payment based on a 30-year loan, or you can choose the 15-year payment option for the fastest equity build-up.

In most cases, you can also make additional principal payments which reduce the amount you need to pay in later months.

Option ARM loan programs.
If you select the minimum payment option in the early years, you should be prepared for a possible sudden increase (often referred to as payment shock) in your monthly payments thereafter.

With the minimum payment option, your monthly payment is set for 12 months at your initial interest rate. After that, the payment changes annually, and a payment cap limits how much it can increase or decrease each year.

If you make the minimum payment after the end of your initial interest rate period, which usually holds only for the first 1 to 3 months, it may not be enough to pay all of the interest charged on your loan for the previous month and the unpaid interest will be added to the principal balance you owe (will be deferred).

Interest-Only Payment

With the interest-only payment option, you can avoid deferred interest, when the minimum payment is not enough to pay the monthly interest due. The interest-only payment option, however, is not available if the interest-only payment would be less than the minimum payment. Please note, that this payment option does not result in your principal reduction.

The interest-only payment may change every month based on changes in the ARM index used to determine your fully indexed rate.

Fully Amortizing 30-Year Payment

With fully amortizing payments, you pay both principal and interest and keep your loan on schedule. Your payment is calculated each month based on the prior month's fully indexed rate, loan balance and remaining loan term.

Fully Amortizing 15-Year Payment

If you prefer to put your loan on an accelerated schedule and can afford higher monthly payments, the 15-year payment option allows you to repay your loan twice as faster and save more than half the total interest costs of a 30-year loan.

Option ARM loan programs:
PayOption ARM, CashFlow Option Loan, 1-Month Option ARM, Flex 5 Home Loan, Pick-a-Paymentsm Loan, 12 MAT ARM, Option Power ARM, FlexPay® 12 MAT, FlexPay® 3/1 LIBOR ARM, OptPAY ARM.
It is important to shop carefully and investigate several loan products.

Option ARM loan programs may vary in the initial rate, negative amortization and lifetime caps, ARM index, or optional features, however, when comparing one option ARM with another, pay close attention to the margin and the fully indexed rate. Keep in mind that the initial interest rate holds only for the 1st month.

Your Minimum Payment Rate or 'Start Rate'. It may vary from 1.25% up to 3.95% and depends on your Loan-to-Value Ratio (LTV).

With hybrid option ARMs, that use a different minimum payment calculation method, your initial rate is usually higher.

Option ARM loans are available with an initial introductory period, usually of 1, 3 or 6 months, after which the interest rate may change.

Some option ARM are currently offered without any introductory period, so the fully indexed rate (FIR) is effective immediately.

The initial Fixed-Rate Period should not be confused with Initial Fixed-Rate / Fixed-Payment Period, a typical feature of hybrid option ARMs.

With 1-month option ARMs that have a 1-month introductory period, the first interest rate change occurs when the 1st monthly payment is due. Thereafter, the interest rate may change monthly.

If you have a 1-month option ARM loan with a 3-month introductory period, the first interest rate change occurs when the 3rd monthly payment is due. Subsequent interest rate changes may occur each month thereafter.

Interest Rate = Start Rate

Monthly Payment = Minimum Payment
or Interest-Only Payment
or Fully Amortizing 30-Year
or Fully Amortizing 15-Year
Interest Rate = Fully Indexed Rate
Periodic adjustments after the introductory period:
Event Loan Feature Change Frequency Cap
Monthly Interest Rate Adjustment Fully Indexed Rate Monthly Lifetime Cap
Annual Minimum Payment Change Minimum Payment Annually Payment Change Cap
Loan Recast
Minimum Payment
Every 5th Year None
Other adjustments:
Event Loan Feature Change Frequency Cap
Loan Recast (negative amortization limit is reached) Minimum Payment Irregularly: None

The sum of the margin and the most recent index figure available prior to a scheduled interest rate change date. Subject to the interest rate caps.

Note: Your interest rate can be equal to the index rate plus the margin exactly, or it can be rounded to the nearest one-eighth of one percentage point (.125%).

Index: (MTA)
Margin
Fully Indexed Rate ('as it is'): ( = index + margin )
Fully Indexed Rate (rounded to the nearest 0.125%):
Fully Indexed Rate (FIR): Sum of the Margin and the Index.

With option ARMs, the adjustment period is usually set to 1 month: the fully indexed rate may not change more than once every month based on the movement of the index.

A lifetime cap limits the interest rate increase over the life of the loan. It protects you financially and usually is expressed as maximum rate. Lifetime caps may vary from 9%-10% up to 19%.

Initially (for the first 12 months), the minimum payment is calculated using the start rate, the amount you borrow and the loan term. Thereafter, it is recalculated annually.

Loan Amount
Initial Rate: 1.25%
Index: MTA
Margin
Payment Cap
Fully Indexed Rate = index + margin
Fully Indexed Rate
Minimum Payment Changes

Minimum Payment Adjustment Period

The minimum payment adjustment period is usually set to 12 months, unless negative amortization limit is reached.

A limit on how much the minimum monthly payment can change at each adjustment. With most option ARMs, your payment cap will be 7.5% of minimum payment amount in first five years. It means that on any Payment Change Date, the minimum payment cannot increase or decrease by more than 7.50% (unless the loan is recast or the negative amortization limit is reached).

Note: With some loans, the minimum payment is subject to a 7.5% increase with no limit on the decrease (in a declining interest rates environment).

Negative Amortization Cap (Balance Cap, Negative Amortization Limit, Negative Amortization Ceiling)

It limits the loss of equity in your home when low monthly payments do not cover fully the interest rate charges agreed upon in the mortgage contract and is usually set to 110% - 125% of your original principal balance.

When the negative amortization limit is reached, the minimum payment increases immediately: the payment required to fully amortize the loan over the remaining term becomes the new minimum payment, and the payment cap does not apply.

Recasting (or re-calculating your loan) is another way of limiting negative amortization and keeping your loan on the original schedule. The main purpose of recasting is ensure the loan is paid off within the scheduled amortization period.

Option ARM loans are usually recast every five or ten years (or sooner, if the negative amortization limit is reached). This re-calculation (or re-amortization) is based on the outstanding principal balance, the remaining term and the fully indexed rate.

When the loan is recast, the payment required to fully amortize the loan over the remaining term becomes the new minimum payment, and the payment cap does not apply (the payment cup, however, will go back into effect immediately after the recast, and will hold until the next time your loan is recast).

A new minimum payment is calculated for the payment due on the 61st month based on the fully indexed rate at that time, the remaining term of the loan and the loan balance at that time. There are no other payment options for this (61st) month. This new recast payment becomes the new minimum payment for the upcoming 12 months subject to a 7.5% (or whatever your payment cap is) increase the following 12 months and subject to a full recast 5 years from this payment recast, i.e. when the 121st payment is due.

The 1st Negative Amortization Limit Recast occurs when (or if) the negative amortization cap is reached. The loan is automatically recast for the remaining portion of the standard recast term (5 years) and then subject to recast at the normal scheduled (5 year) recast period.

For example, if the loan reaches the negative amortization cap on month 59, the loan goes through a Negative Amortization Limit Recast. At the end of the 5th year, on the 61st month, the loan goes through a scheduled Standard 5-Year Recast.

* Monthly Treasury Average (MTA)
* Cost of Savings Index (COSI)
* London InterBank Offered Rate (LIBOR)
* 11th District Cost Of Funds Index (COFI)

These indexes change once a month.
Historical performance of the four most popular option ARM indexes over the last 14 years.
Historical performance of the four most popular option ARM indexes over the last 14 years.
Generally, lenders use the most recent Index figure available as of the date 15 days before each interest rate adjustment date. This Index value is called the 'Current Index'.

The number of percentage points (for example, 2.75) the lender adds to the index rate to calculate the ARM interest rate at each adjustment. The margin is set in the mortgage contract, remains fixed for the term of the loan and is not impacted by the financial markets and movement of interest rates.

Option ARMs don't have First Interest Change Cap or Periodic Interest Change Cap*. Initial and periodic interest rate changes are not capped and move with the market, as long as the rate adjustments do not exceed the lifetime cap. The interest rate cannot adjust lower than the lifetime floor.

* Lifetime Cap (or Maximum Rate)
* Lifetime Floor (or Margin)
* Payment Cap (or Minimum Payment Change Cap)
* Balance Cap (or Negative Amortization Limit)

* This is not the case with so-called hybrid (combined) option ARMs. Hybrid option ARM loan programs usually have both First Interest Change Cap and Periodic Interest Change Cap, however, their minimum payment adjustments are not capped (i.e. there is no Payment Cap). Both hybrid and standard option ARMs have Balance Cap (a. k. a. Negative Amortization Limit).

Full doc, Limited doc, Low doc, Stated Income, No Income\No Asset (NINA), Stated Income\Stated Assets (SISA). Read more about Loan Documentation Requirements. Click here for a list of documents most lenders will require in order to process your mortgage application.

Option ARM loans may have an initial fixed rate period between the time the loan is originated and the first interest rate change date. After the initial fixed period the loan usually converts to a monthly-adjustable option ARM. Hybrid Option ARM loan programs have either an initial fixed payment period or an initial fixed rate / fixed minimum payment period of 3 to 7 years.

Some option ARM loans, for a fee (or for an increase in your rate), contain a provision permitting you to increase the term of the loan from 30 to 40 years.

Some lenders offer optional bi-weekly payment plans with option ARMs. With bi-weekly mortgage plan you pay half of the monthly mortgage payment every 2 weeks. It allows you to repay a loan much faster. For example, a 30 year loan can be paid off within 18 to 19 years.

The interest rate or points may be somewhat higher for a convertible option ARM, and it may require an additional fee at the time of conversion.

Option ARM Calculator. See also: Advanced Option ARM Loan Amortization Calculator.

Margin
Fully Indexed Rate
Minimum Payment
Deferred Interest
Interest Only Payment
Fully Amortizing 30-Year
Fully Amortizing 15-Year
Fully Amortizing 40-Year

This article describes some of the features offered with option ARM loan products.

Don Coker
Banking, Economic, Valuation & Management Consultant
423 Latimer Street
Woodstock, GA 30188-5052

Banking Expert Witness Consultant's Biographical Data

Curriculum Vitae

Don Coker
Banking, Management, Valuation & Economic Consultant
423 Latimer Street
Woodstock, GA 30188

Telephone: (770) 852-2286

Telecopiers: (973) 201-2534 or (610) 643-7870 or (419) 517-5284

Cellular: (251) 716-3200

E-Mail: Bankexpert@cs.com

I. Representative Client List

A. Banking:

The World Bank
Citigroup/CitiFinancial
Bank of America
Bank of America - Canada
MBNA America Bank
NationsBank
Barnett Banks, Inc.
Bank One (now JPMorgan Chase Bank)
JP Morgan Securities, Inc.
Chase Home Loans, Inc.
Wachovia Bank
First Union Bank
SouthTrust Bank
Wells Fargo Bank
Wells Fargo Mortgage Corp.
Washington Mutual Bank
Firstar/U.S. Bancorp
Citizens Bank of Pennsylvania
National City (Bank) Corporation
KeyCorp
Bank of Oklahoma
Provident Bank
Royal Bank of Scotland Group, plc
Banco Bilbao Vizcaya Argentaria (Bilbao and Madrid, Spain)
Countrywide Home Loans, Inc.
Countrywide Financial Corporation
Credit Suisse First Boston Mortgage Capital
First National Bank of San Marcos, TX
Banco Industrial de Venezuela (Caracas and Miami)
Southern Security Bank
First National Bank of Palm Beach
First Bank, Tallahassee, FL
Sunbelt Savings (now Bank of America)
Sunbelt Federal Bank
Bancomer, S.A. (Mexico)
Bluebonnet Savings
Standard Pacific Savings Bank
First National Bank of Brewton
Southeast Bank of Miami, FL
Bank of the Southwest
Community National Bank, Midland, TX
Northshore Bank, TX
Bank of Bentonville, AR
Priority Bancorp
PanAmerican Bank
Iowa Trust
Tanzania Institute of Bankers
Bank of Tanzania (central bank)
Federal Reserve Bank of Atlanta
Goldome Realty Credit Corp.
Western Gulf Savings & Loan (now Wells Fargo Bank)
American Savings & Loan
William E. Wood & Associates (Re: Towne Bank, VA)
EDS - BEI Golembe Consultants
Bank Insurance and Securities Association

B. Governmental:

Federal Deposit Insurance Corporation (FDIC)
Resolution Trust Corporation (RTC)
Federal Savings & Loan Insurance Corporation (FSLIC)
Federal Home Loan Mortgage Corporation (Freddie Mac)
Farm Credit Bank
U.S. Department of Education, Inspector General's Office
Internal Revenue Service, U.S. Treasury Department
U.S. National Library of Medicine, National Institutes of Health
State of Texas, Savings & Loan Department (Regulators)
13 Municipalities in CA and CO
Tanzania Revenue Authority
United Nations Conference on Trade & Development
U.S. Agency for International Development (Washington, D.C.; Kiev, Ukraine; Moscow, Russia)
U.S. Air Force Judge Advocate General's Corps, Office of Special Investigations (Guantanamo Bay, Cuba)
New York Governor George Pataki's Office of Regulatory Reform

C. Insurance:

AIG
CNA
St. Paul Travelers Insurance
Liberty Mutual Insurance Company
Acadia Insurance Company
Erie Insurance Group
State Farm Insurance Coompany
Military Premium Managers
Reliance Insurance
International Transport Intermediaries Club, Ltd., UK
North River Insurance Company
American Casualty Insurance Company
National Union Fire Insurance Company
Continental Casualty Insurance Company
Physicians Mutual Insurance Company
Physicians Life Insurance Company
Lloyds of London, UK
Crum & Forster Managers
Xerox Financial Services
Thomas Miller & Company, UK

D. Corporate:

Ford Motor Credit Company
Cisco Systems
IBM - Lotus Development
Kawasaki
Toshiba
Extraordinary Trustee for Parmalat Finanziaria S.p.A. (Italy) in Extraordinary Administration
Intuit, Inc.
Wal-Mart Stores, Inc.
Wal-Mart Real Estate Business Trust
Fraud Discovery Institute
Doral Mortgage Corp.
Ambassador Mortgage
Security Properties
McGladrey & Pullen, LLP (CPAs)
Savannah-Baltimore Capital Management, LLC
Chicago Fundamental Investment Partners, LLC
Prentice Hall Publishing
Central Financial Services
NAPA Auto Parts
Pioneer Financial Services
Sansbury Ace Hardware
Madison Equity Mortgage Company
Darryls Restaurants
Bosler & Hashioka Developers
Sears
Scorpion International Services, S.A. (Athens, Greece)
Heritage Motels. Inc.
Sunrise Gardens Apartments, Las Vegas, NV
Barrons Educational Software
Anco Merchandising
Operative Plasterers & Cement Masons International Association
Network Software Associates
Calco Aerospace
Midwest Merger Management
Education Central, Inc. (U.S. Virgin Islands)
Ruby Tuesday
Remington Investments
Inverelle, Inc.
Alpha Software
Phivos Karnaos (London & Moscow)
Simon & Schuster Publishing
The King Edward Inn (Canada)
Jancik Concrete Specialties
Keytronics
Ventana International Equities (British Virgin Islands & Costa Rica)
Concord Boat Corp.
NBI Software
Houlihans Restaurants
Sprint/Nextel
Ukrainian Accounting Reform Project (Kiev, Ukraine)
International Accounting Standards Board Foundation (London)
Stanford Carr - Ewa Development (Hawai'i)
Royster-Clark Agribusiness
American Consolidated Credit
Specialty Motor Cars
George B. Kaiser, Forbes 400 List
ButtonWare Software (PC Calc+)
Fillette Green Shipping
Zapadnoe Koltze (Moscow, Russia)
Benchmarking Partners
Gary Tharaldson, Forbes 400 List
Boston Credit Corp.
Dr. Richard Dombroff
Morrisons Cafeterias
Transcontinental Products & Services
Reynolds Lumber Company
Broderbund Software
Marchese Chevrolet
Surgency
Westat
Computer Associates
AvtoVAZ (Russia's largest car company - LADA automobiles)
AutoVAZBank (Tagliatti, Russia)
Import Specialists
Timeworks Software
Fleming Electric Co.
WordStar
Christian Bay Shipping Company
Cliffs Notes Publishing
DataEase International
CreditCare Credit Counseling
AddStor Software
Olympic Cube (Athens, Greece)
Kilimanjaro International (Africa)
Chemonics International
Institute for Stock Market and Management (Moscow, Russia)

II. Past Professional Memberships

- American Bankers Association
- American Institute of Banking, Chapter Officer and Bank Consul
- U.S. League of Savings Institutions
- Institute of Financial Education, Instructor
- Mortgage Bankers Association
- Texas Mortgage Bankers Association
- American Council of State Savings Supervisors
- American Bankruptcy Institute - Committee assignments: Public Companies, Real Estate, International, U.C.C., Commercial Fraud Taskforce, Real Estate, Healthcare.
- Board of Realtors
- National Association of Homebuilders
- International Council of Shopping Centers
- American Political Science Association
- Southern Political Science Association
- Houston (TX) Chamber of Commerce, Economic Development Committee, 9 years

III. Books, Publications & News Media

Complete Guide to Income Property Financing & Loan Packaging, Prentice Hall, 1984.
Self-Management: A Guide to Career Advancement and Development, written under contract for Prentice Hall, 1985.
Complete Real Estate Computer Workbook, Technical Editor, Prentice Hall, 1986.
The Complete Loan Officers Handbook, presently writing.
"Money Laundering: A Dirty Business," White-Collar Crime Reporter, Oct. 1991.
Treasury Magazine published by The Economist. Interviewed and quoted in an article written by a U.S. News and World Report Editor.
"How You Can Help Your Client Get a Loan to Finance Real Estate Projects," Practicing Attorney's Newsletter, April 1984.
"Getting a Grip on Core Deposit Intangibles," American Banker newspaper, 1996.
"The Dollars and Sense of Business Valuation," published on the website of the American Bank Attorneys Association, April 1996.
"Putting a Cash Value on a Business," interviewed by Lawyers Weekly, May 6, 1996.
"Business Valuation Techniques," Business Locator, May 1996.
"Valuing Businesses," TAB Letter, Technical Assistance Bureau, June 1996.
"Using Business Value to Achieve Ad Valorem Tax Reductions on Commercial Real Estate Properties," Journal of Property Management, June 1997.
What's Working in Credit & Collection, interviewed, quoted re: bank drafts, March 1997.
"Making Sense of Internet Stock Values," TAB Letter, July 1999.
Africa Today, extensive video coverage by Reuters News Agency of Tanzania Revenue Authority training program, Arusha, Tanzania, March 11, 2001, and other dates.
Interviewed by ITV Television Network on the subjects of banking, taxation, economic growth and development, and capitalism in Tanzania, in Arusha, Tanzania, March 16, 2001. Aired on March 17, 2001, and subsequent dates.
The Atlanta Journal-Constitution, interviewed for an article on banking regulatory policies and procedures, and banking practices, August 21, 2001.
The Atlanta Journal-Constitution, interviewed for an article on banking practices and procedures to help deter terrorism, September 19, 2001.
The Atlanta Journal-Constitution, interviewed for an article on banking practices and procedures involving funds transfers and money laundering by terrorist groups. September 21, 2001.
The Baltimore Sun, interviewed for an article regarding considerations for the future of Allied Irish Banks, PLC's, American subsidiary Allfirst Bank. May 30, 2002.
The Atlanta Journal-Constitution, interviewed for an article on the effects of the September 11, 2001, terrorist events on banking practices and procedures, August 29, 2002.
Credit and Collections World magazine and website, interviewed regarding bank account opening practices and identity theft, September 20, 2002.
Outside the Lines television show and ESPN.com website, interviewed regarding identity theft matters. November 1 - 3, 2002.
Lending Intelligence magazine and website, interviewed regarding lending practices and interest rates, November 25, 2002.
NBC Evening News, interviewed regarding identity theft, November 25, 2002.
Lending Intelligence magazine and website, interviewed regarding credit scoring and loan approval policies and procedures, December 10, 2002.
Charlotte Observer newspaper, interviewed regarding bank branching and operations policies, January 21, 2003.
Street & Smith's SportsBusiness Journal, interviewed regarding business ethics and corporate governance issues involving the U.S. Olympic Committee's Chief Executive Officer, February 25, 2003.
Family Finances column that appears in The Boston Herald, the Pittsburgh Post Gazette, the Palm Beach (FL) Daily News, and some Scripps Howard newspapers. interviewed regarding credit card debt matters, September 23, 2003.
The Denver Post, interviewed regarding banking economics and bank branching January 21, 2004.
Mortgage Lending Compliance Alert, interviewed regarding housing market outlook, economic and interest rate outlook, and lender profitability strategies. Feb. 2004.
CFA (Chartered Financial Analyst) Magazine, published by the Association for Investment Research, which recently became the CFA Institute. Interviewed by this professional certification organization that promulgates standards for investment professionals worldwide regarding business ethics and corporate governance issues. May 2004.
Continental magazine, interviewed regarding banking and its effect on economic resurgence, especially as it relates to Ireland. July 6, 2004.
European Business School, International University; Schlob Reichartshausen, Germany. Interviewed regarding intellectual property and business valuation techniques. July 24, 2004.
San Francisco (CA) Daily Journal, a legal newspaper, quoted regarding the alleged bank fraud and credit card fraud factors related to alleged Guantanamo Bay, Cuba, U.S. Air Force translator spy Ahmad Al Halabi, July 28, 2004.
Bank Tech & Security Newsletter, provided direction to a bank on the proper way to handle an attempted fraudulent international wire transfer. September 30, 2004.
Small Business Times, provided information concerning business valuation issues. September 30, 2004.
Mortgage Lending Compliance Alert, interviewed regarding the Bank Secrecy Act and Suspicious Activity Reports (SARs). October 12, 2004.
Mortgage Lending Compliance Alert, provided input for an article concerning compliance with the rules and regulations of lending. November 4, 2004.
Mortgage Lending Compliance Alert, provided input for an article on the Fair and Accurate Credit Transactions Act of 2003, a/k/a/ FACTA or FACT Act. Mar. 16, 2005.
Bank Technology & Security Alert, provided input for a question and answer section regarding online bill paying. April 11, 2005.
Mortgage Lending Compliance Alert, provided input for a question and answer section regarding closing costs for home mortgages. May 18, 2005.
Newark Star-Ledger newspaper, interviewed on the subjects of check cashing and the need for enhanced identification verification systems. May 26, 2005.
Bank Insurance & Securities Marketing Magazine, interviewed regarding ethical training considerations and the Securities & Exchange Commission's recently enacted Investment Adviser Code of Ethics. June 21, 2005.
Mortgage Lending Compliance Alert, provided input for an article regarding the legal, regulatory, and marketing considerations of providing lending services to Spanish speakers. June 21, 2005.
Bank Security & Technology, provided input for a question and answer section regarding bank facility security. August 11, 2005.
Bank Security & Technology Alert, provided input for an article regarding the security of bank computer systems. November 9, 2005.
Chicago Sun-Times, interviewed on bank marketing issues. January 9, 2006.
American Prospect Magazine, provided input for an article on business and banking ethics written by a reporter for the Philadelphia Daily News. February 1, 2006.
Bank Security & Technology Alert, provided input for a question and answer section regarding bank record retention. February 8, 2006.
Chicago Sun-Times, interviewed on checking account issues, March 13, 2006.
ABC News/Disney - Miami, FL, interviewed for a national radio broadcast regarding credit card fraud and identity theft issues. April 21, 2006.
AML (Anti-Money Laundering) Compliance Alert, provided input for an article about the BankAtlantic money laundering case and anti-money laundering policies and procedures. May 5, 2006.
WJNO AM 1290 Clear Channel Radio, live on-air telephone interview by John Howe regarding the loss of credit information on 26.5 million veterans. May 23, 2006.
Mortgage Lending Compliance Alert, provided input for an article about documentation requirements for closing a loan. June 12, 2006.
Virginia Pilot newspaper, Provided opinions for an investigation into suspected mortgage fraud. October and December 2006.
Chicago Sun-Times, interviewed and quoted regarding bank economics and ABN Amro’s decision to layoff 900 people at LaSalle Bank in Chicago. December 28, 2006.
WSB-TV (ABC), Atlanta, GA, interviewed on television regarding the T.J. Maxx credit file data loss and data losses in general. March 29, 2007.
WSB-TV (ABC), Atlanta, GA, interviewed on television regarding credit card and debit card fraud. May 3, 2007.
Forbes Magazine, interviewed and quoted regarding banking and lending practices. August 8, 2007.

IV. Patent

On July 8, 2002, the United States Patent & Trademark Office registered a Provisional Patent to Don Coker for a business process for improving the prevention and detection of financial fraud involving personal and business checks, cashier's checks, postal and commercial money orders, letters of credit, bills of exchange, drafts, and many other types of financial instruments. On July 1, 2003, the formal Patent Application was filed. This Patent was sold in December 2006 and closed in early 2007.

V. Civic Activities

Katy School District (Houston suburb), Trustee, elective position.
U.S. Army Reserve, 1966-1968, Officer Training, Ft. Bragg, NC; Honorable Discharge.
Nottingham Country Civic Club, officer, 1,500 family neighborhood association.
Sunday School teacher, usher, host.
Member of the High Art Museum, Atlanta, GA.
Grady Health System – Uncompensated volunteer consultant to the Metro Atlanta Chamber of Commerce’s Greater Grady Task Force studying the financially troubled Grady Hospital and Grady Health System for the purpose of making recommendations to improve the operations and finances of Georgia’s largest hospital and healthcare system.

VI. Education

College & University:

University of Alabama, BA.
University of Alabama, post-graduate work.
University of Houston, post-graduate work.
Spring Hill College, AL, masters degree-level work.
Southern Methodist University, TX, executive education work.
Harvard Business School, Harvard University, MA.
Certificate in Business Valuation.

Secondary Education:

University Military School, Mobile, AL. 12-year prep day school.

Professional Education:

- American Bankers Association - American Institute of Banking: financial statement analysis, business finance, bank investments, principles of bank operations, bank management, trusts.
- National Institute of Real Estate Boards, commercial real estate finance.
- International Council of Shopping Centers, shopping center finance.
- National Hospital Association, one-week workshop in healthcare entity finance and valuation.
- Mortgage Bankers Association, workshops in multi-family and SFR lending.
- Federal Home Loan Bank of Dallas, training workshops on financial institution management, lending, investments, operations, et. al.
- Texas Savings & Loan Department, training workshops on financial institution management, lending, investments, operations, et. al.
- Federal Home Loan Mortgage Corp., real estate financing workshop.
- First National Bank of Mobile, AL (now AmSouth Bancorporation), financial statement analysis, business finance, bank investments, credit card operations, deposit operations, bank management, trusts.
- Gibraltar Savings Association (now Bank of America), commercial real estate finance, valuation, joint-ventures.
- Citicorp, business, corporate, and real estate finance, valuation, deposit products, investments.
- Southwest Bancshares (later Bank One, now J.P. Morgan Chase Bank), business finance and real estate investments.
- Commercial Credit Corp. (now Citigroup), one-week Corporate Marketing Conference covering in-depth training in all financial products, plus 28 CDC Learning Center courses (equivalent to 45 semester hours) in business and economic subjects.
- Frost Bank, advanced credit analysis and business finance.

VII. Professional Background Summary

- 20+ years experience in management at banks, savings & loans, credit companies, mortgage banking companies, and a governmental financial institution regulatory agency.
- Positions held include Board of Directors member, Executive Vice President, Senior Vice President, Manager of Lending, Manager of Mortgage Banking, Regulatory Supervisory Agent tantamount to CEO).
- Committee memberships included Loan Committee, Executive Committee, Audit Committee, and Pension Plan Trustee.
- Served as a corporate officer of various financial institution subsidiaries.
- Management responsibilities included as many as 300 people in 22 locations nationwide in ten states and $1 billion in gross assets.
- Directly responsible for originating over 36,000 loans of all types totaling approximately $5 billion, reviewing well over 100,000 financial statements and credit reports, and over 25,000 appraisals.

VIII. Other Professional Activities

- Consultant on various economic, valuation, real estate, marketing, and banking matters for clients in 44 states and several foreign countries.
- Expert Witness, for plaintiff and defense, listed in both the American Association for Justice's (f/k/a the Association of Trial Lawyers of America) and the Defense Research Institute's databases of recommended consultants, plus state and local databases in AZ, AR, CO, DC, HI, IL, IA, LA, MN, MS, NY, NC, OH, PA, SD, WA, and San Francisco.
- Phillips College, former Adjunct Professor of Business.
- Institute of Financial Education, approved instructor for the educational arm of the U.S. League of Savings Institutions.
- Prentice Hall Publishing, Simon & Schuster, Paramount Communications, technical editor and consultant on banking and real estate subjects.
- Holiday Inn, Lender Advisory Panel.
- Rodeway Inn, Lender Advisory Panel.
- Novick's Money Market Seminars, panelist.
- National Directory of Corporate Distress Specialists, approved management consultant.
- Licensed Sports Agent, approved by the NCAA, Major League Baseball Players Association, and the AL Athlete Agents Regulatory Commission.
- American Arbitration Association, approved Professional Commercial Arbitrator.
- State of Texas Real Estate Commission, approved instructor and writer of courses.
- Texas Real Estate Broker's License held for over ten years.

IX. Recognition in Biographical Reference Books

- Who's Who in America, 52nd - 56th eds.
- Who's Who in the World, 12th - 16th eds.
- Who's Who in Finance & Industry, 26th - 29th, 33rd eds.
- Who's Who in Medicine & Healthcare, 1st - 6th eds.
- Who's Who in the South & Southwest, 21st - 29th eds.
- Directory of Distinguished Americans, 5th ed.
- Who's Who Registry of Global Business Leaders, 1993 - 1994 ed.
- Who's Who of Emerging Leaders of America, 3rd ed.
- Who's Who Registry of Business Leaders, 1994 ed.
- Personalities of America, 5th ed.
- Personalities of the South, 14th ed.

X. Employment History

1986 - Present: Banking, Management, Economic & Valuation Consultant, Woodstock, GA.

● Consulting assignments covering a broad range of activities such as governmental regulatory oversight, interim CEO management of financial institutions, workout and restructuring of troubled loans, business valuation, asset valuation, intangible asset valuation and issues, bank income tax issues, merger & acquisition assistance, due diligence, business plans, management advice, policy and procedure manual matters, international engagements, writing & editing business books, feasibility studies, marketing studies, research, commercial real estate studies & advice, training & educational activities.

● Expert Witness engagements nationwide for plaintiffs and defendants covering all areas of banking, valuation, securities, economics, economic damages, credit damages, trusts & estates, real estate, credit cards, FACTA cases, leasing, international matters, funds transfers, bankruptcy preference, management, credit, finance, and business. Over 365 cases and 93 testimonies nationwide.

1985 - 1986: Executive Vice President, Manager of Lending & Board of Directors Member, Home Savings (now Citigroup), Houston, TX. Manager of all lending and mortgage banking. Number Two Executive. Heavily involved in investments and deposit activities. Officer of several subsidiary companies. Member of Loan Committee, Executive Committee, Audit Committee, et. al.

1984 - 1985: Senior Vice President, Manager of Lending, First Federal Savings (now Guaranty Bank), San Antonio, TX. Manager of all lending and mortgage banking. Number Two Executive. Heavily involved in investments and deposit activities.

1983 - 1984: Southwest Regional Manager, Ford Motor Credit Corp., Houston, TX. Manager of commercial real estate finance, and some financing with dealers.

1977 - 1983: Regional Manager, Commercial Credit Company (now Citigroup), Houston, TX. Manager of commercial and residential real estate financing for the southwest, and involved in all financial products offered by the $7 billion company. Received the largest bonus in the history of the company - twice.

1974 - 1977: Manager of Commercial Real Estate Lending and Mortgage Banking, Southwest Bancshares (later Bank One, now JPMorgan Chase Bank), Houston, TX. Also involved in the origination and administration of construction loans, deposit and investment activities for lending clients including wealthy foreign nationals, corporate and personal lending, and credit card operations.

1973 - 1974: Assistant Regional Manager and Assistant Treasurer, Citicorp Real Estate, Houston, TX. One of Citicorp's youngest officers ever. Mortgage banking and construction lending for Citibank, N.A. (NY), and deposit and investment activities for wealthy foreign clients.

1972 - 1973: Loan Officer and Manager of Lending Department, Gibraltar Savings (now Bank of America), Houston, TX. At age 26, managed the day-to-day operations of Texas' largest S&L (55th largest in the U.S.). Handled construction and subdivision development loans, joint-ventures, and high-volume builder accounts.

1968 - 1972: First National Bank of Mobile (later AmSouth, now Regions Financial), Mobile, AL. Mortgage and real estate specialist in the Trust Department. Trained and worked in all areas of the bank including checking and savings, credit, corporate lending, personal lending, international, investments, trusts, credit cards, and funds transfers.

=======================================

Expert Consulting in Banking Litigation: Why Banks Should Always Use an Expert Witness Consultant

an article by Don Coker

Banking litigation is usually complex and includes issues that are difficult for the typical juror to understand. Even cases that may at first appear to deal with simple issues, such as checking account cases, actually involve innumerable subsidiary issues that promise to confuse even the most sophisticated juror - and judge, for that matter.

Plaintiffs always hire an expert witness to better understand their case and explain it to a judge and jury. However, many banks are reluctant to hire an outside independent expert witness consultant to assist them in defending their positions. It is only logical that both sides in banking litigation afford themselves the advantage of an outside independent expert witness consultant.

My experience includes extensive work for both Plaintiffs and Defendants in banking litigation, and I am privileged to be listed in the recomended consultant databases of both the American Association for Justice (f/k/a/ ATLA) and the DRI.

What Banks Do Now

In most cases, a bank on the either the defense or plaintiff side of a lawsuit chooses to do one of three things:

1. Go it without an expert and try to discredit the other side's expert.

2. Offer an "expert" that is from within the bank.

3. Offer an "expert" from the bank down the street.

Unfortunately, all three choices are bad ones for a bank and virtually always cause them to needlessly shoot themselves in the foot. Consider that in choice 1, a bank assumes a defensive position and offers no offensive position, foregoes offering any independent support for its positions, places itself in the undesirable position of badgering the other side's expert - perpetuating the "bully" stereotype that many jurors secretly hold, and give jurors the idea that the bank cannot find any external independent expert to support its positions.

In choice 2, a bank choosing an inside "expert" is kidding itself. By making this choice, a bank is essentially choosing to rely on the risky "We've always done it this way" defense. Plus, the bank is often relying on "expert" testimony from the very employee or employees that carried out the actions that precipitated the lawsuit. Banks that do this do so because they like to have complete control over the witness, and feel that their unwillingness to acknowledge any possible problem renders it moot. However, judges and jurors easily see through this contrived tactic and will never believe that an employee of a bank is going to go into court and say anything negative about the employer that signs their paychecks. Not only does this practice insult the intelligence of the judge and jurors, it damages the bank's defense by depriving it of being able to present an independent and objective opinion that reflects what other banks do in the pertinent circumstances. In-house "experts" simply do not have the required independent credibility and cannot offer the industry-wide experience that can be provided by an external independent expert consultant.

Likewise, choice 3 is ineffective in the same way as choice 2 in regard to the lack of an industry-wide view. And similarly, it is well known that it is unheard of for an employee of one bank to go into court and speak disparagingly against a competing bank down the street. The plaintiff's attorney is offered a fertile field to criticize the "Conspiracy of Silence" theory regarding the purported banking industry policy of bankers not testifying against each other.

It is a mystery and a serious tactical error for a bank involved in litigation not to seek the assistance of an outside independent expert witness consultant. There is no reason why banks should feel exempt from this practice that is standard throughout the rest of the world of litigation.

Four Reasons Why Banks Need Expert Consultants

1. A knowledgeable and objective expert consultant can explain to a judge and jury the actions taken or not taken by the bank. This is clearly preferable to an explanation by either an insider of the bank or a banker down the street who the judge and jury may think is hoping to protect himself from a similar situation or either earn a quid pro quo for use in future litigation that may be directed toward his own bank.

2. Again, an objective opinion from a qualified outsider regarding the reasonableness of the bank's actions, policies, etc., is more convincing to a judge and jury than is a similar opinion voiced by an interested party, such as an in-house expert or a quid pro quo expert.

3. An expert consultant with broad exposure throughout the banking industry can offer convincing opinions that other banks faced with similar circumstances have correctly chosen the same actions as those chosen by the bank in the instant case.

4. Simple knowledge of the facts is not enough. Testifying experience and tactical skills are required. Psychologists say that the most stressful event that anyone ever goes through in their life is testifying in a deposition or courtroom. Experienced testifying consultants are used to this pressure and can maintain control of their presentation of the facts.

What Banks Should Do

1. Hire an independent expert consultant who can say that not only what the bank did was correct but that it is done that way elsewhere. Contrast this with the in-house bank "expert" who can only testify about his or her own institution's practices.

2. Be truthful and open with the expert, and grant him or her access to any information they may need or request in order to formulate their opinions. Be assured that the other side will ask your expert at deposition and trial if there were any other materials that they requested and were denied. Likewise, you can be assured that the other side will ask your expert if it is possible that if he or she read so-and-so in Document X, would it change their opinion.

3. A bank should use its own independent expert to help find holes in the testimony of the other side's expert. This is particularly helpful during the deposition phase. If a bank has its expert on-hand for the plaintiff's expert's deposition, immediate feedback can be offered regarding areas of weakness.

4. If it is decided that the situation is one where the bank will likely have to pay damages, do not hesitate to use an independent expert to critique the plaintiff's expert's damages estimate.

Summary

Considering that the stakes are usually large in banking cases, and that one loss can precipitate additional similar lawsuits, including a knowledgeable, credible, independent banking consultant in your litigation strategy is a wise and economically justifiable choice.

This article was written by Don Coker, an experienced banking consultant that has been engaged as an expert witness consultant for over 365 banking cases nationwide since 1989. He has testified 93 times and achieved 10 courthouse settlements. He works with attorneys representing both plaintiffs and defendants; and has assisted law firms of all sizes from solo attorney practices to 27 of the top 250 law firms in the country. Mr. Coker has been engaged for various consulting matters by 8 of the top 10 banks in the country and over 50 banks worldwide.

Mr. Coker is privileged to be listed in the recommended expert witness consultant databases of both the American Association for Justice (formerly known as ATLA) and the DRI.

Mr. Coker does considerable non-litigation consulting in areas such as governmental consulting, business valuation, feasibility and marketing studies, business plans, management consulting, interim management, and international consulting matters for clients in 22 foreign countries and covering work involving 50 countries in the Americas, Europe, Asia, and Africa.

Mr. Coker serves clients nationwide and worldwide from his office in the northern metro Atlanta, Georgia area.

Entire Website Copyright 2002 - 2008 by Don Coker

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