Actually, I’m not going anywhere, at least not yet. (Note to hedge fund owners: it was a joke, really.) The wise-guy headline was meant to get your attention in this post-election era where narcolepsy sets in because you’ve read one too many "What the election means" stories. For mortgage bankers, there’s an irony of "four more (Obama) years": profit margins are absolutely wonderful on the origination side of the business. As M&A advisor Larry Charbonneau keeps telling me: “I’ve never seen margins this good.” Of course, loan volumes have done OK because of refis. Will purchase-money loans ever come back? As Brooklyn Dodger fans used to say: Maybe next year. As for the headline, there’s always talk (and stories) about the frustrated community banker or residential lender who’s getting out because he just can’t take Dodd-Frank any more, along with all the new rules and regulations. The biggest four-letter word in banking/mortgage banking today is "compliance." So, owners are heading for the hills. They’re sick and tired of it and they’re getting out. I just don’t hope the door doesn’t hit them on the rump on the way out. My advice to them is this: good, sell. Get out now while you can. Canada will love you. If everyone gets out at the same time, I’m sure the sale prices will be wonderful. It’s a buyers market…
But here’s my advice to those of you who are staying in mortgage banking, banking, financial services: All the coming rules under DFA are a pain the neck. Hire some attorneys and compliance officers and pass the cost onto the consumer. You heard me right: pass the cost onto the consumer. And when he/she and the regulators whine about it, tell them why you did it: higher compliance costs. Better to charge a bit more in fees in a market where both interest rates and housing prices are low…
As for FHFA chief Ed DeMarco–he’s going nowhere. He’s a career civil servant and he’s getting plenty of kudos in this town (Washington) except for some left-leaning Democrats and certain lobbyists that work for Realtors. (Of course next week some wire service will report that he’s gone and I’ll look stupid.)
HISTORY LESSON: I started out in this business many moons ago as a cub reporter under the late great Stan Strachan. Every time a Republican was elected to the White House, Stan would threaten to move his wife, family and newspaper to Canada. (NMN was privately held back then.) He never did, of course, and he did pretty well as a publisher except for those lean years during the S&L crisis…
BETTER DAYS AHEAD: And now for some good news. Fannie Mae is cutting back on the due diligence contracts it hands out to firms scouring its legacy loans for buyback potential. (See the story on the NMN website.) This potentially means the worst of the buyback carnage is likely behind everyone, large and small alike.
PREDICTION: Going forward, Fannie and Freddie will earn $20 billion a year, money that will wind up in the U.S. Treasury.
NOT BETTER DAYS AHEAD: As NMN’s Brian Collins reported, the independent FHA audit comes out late next week. The betting is that the fund will need to tap the line of credit it has with Treasury. (No need for Congress to act, thank God.) Also, Kate Berry had a good story on Bank of America and its retail mortgage efforts. See both stories in the Monday print version of NMN or on the NMN website: www.nationalmortgagenews.com. To subscribe to the website and paper call 800-221-1809.
MORTGAGE PEOPLE: PrimeLending recently promoted Scott Bristol to executive vice president in charge of national production, just one of seven promotions the fast growing lender unveiled.
TWITTER (MORTGAGE) NEWS: Watch my personal Twitter feed where I provide updates on breaking stories. Just visit Twitter and plug in my name.
MORTGAGE DATA: NMN recently published the 2Q edition of its exclusive Quarterly Data Report product. It includes the nation’s top 100 servicers and top 40 subservicers ("A" paper and subservicers.) To order email Deatra.Todd@SourceMedia.com.
COMPLAINTS? NEWS LEADS? Send them to Paul.Muolo@SourceMedia.com.
FINAL WORD: If any team needs a bye week, it’s the Redskins. To those in storm-ravaged Long Island and New Jersey, hang in there.