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

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

These are happy days for Warren Buffett." - WSJ, 8/21/07

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

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

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