Is Prospect Mortgage the Next Nationstar?

NOV 30, 2012 5:25pm ET
Comments (5)

So, what the heck is going on with Prospect Mortgage of California? This past week National Mortgage News was among the first to report that it had hired former Fannie Mae CEO Mike Williams as its new chairman. A few weeks back the nonbank lender hired industry veteran Amy Brandt to lead the company’s expansion into correspondent lending and servicing. And didn’t a related affiliate recently hire servicing guru Mike Lau of Phoenix Capital who was a key figure there in helping Bank of America unload its MSRs? As one observer told us: “They’re trying to be the next Nationstar,” which is interesting. Nationstar went public earlier this year. Perhaps Prospect is toying with the idea of IPO? The nonbank lender/servicer is owned by Sterling Partners and as we all know, PE funds don’t like to keep anything for too long. If you have any intelligence drop me a line at Paul.Muolo@SourceMedia.com...

PE funds and hedge funds, by the way, are interesting creations. But what are they really? Answer: A bunch of rich investors pool their money and buy companies (or stock or real estate or something else) with the idea that their investment will grow with time. Some hedge funds are good corporate citizens while others are not. Some treat their employees well while others do not. (Yes, I’m thinking of those guys who drove a stake through the heart of Twinkies.) But I only bring this up because I keep thinking about the bath that Cerberus Capital must’ve taken on GMAC Mortgage. GMAC was once a top flight company—iin both residential and commercial mortgage banking. Its warehouse lending group – led by Larry Pendleton (remember him?)—was once the king of the industry. (Larry retired before the downturn.) Now GMAC is more or less done. What’s left of it is owned by Uncle Sam which is selling it to Ocwen Financial

And one more thought about that last blurb: it would be nice to do a story one of these days on mortgage firms that have been around for, say, more than 20 years. Any candidates? Drop me a line…

SERVICING UPDATE: In case you missed our website report on Friday,  IMA has a large MSR package in the market and MountainView is busy evaluating MSRs left and right. Wonder what MIAC is up to?

Has anyone ever wondered why so many servicing advisor firms are headquartered in Denver? It must be the skiing…

MORTGAGE TECHNOLOGY: Check out Austin Kilgore’s story on some banks using mobile apps for mortgages http://bit.ly/Tyyh6F.

WASHINGTON NEWS: The House Financial Services Committee has a new chairman and his name is Jeb Hensarling of Texas and he’s no Henry Gonzalez. (I’m dating myself here.) Hensarling is a Republican and as some mortgage bankers might recall, 18 months ago he re-introduced legislation to stop taxpayer-funded bailouts of Fannie Mae and Freddie Mac and put these two companies on a path towards privatization. In short, he’d like to play vampire hunter to the GSE’s Dracula but this past week he also came out issuing a statement against using Fannie/Freddie g-fees to pay for non-housing initiatives like the STEM Jobs Act. The STEM act is an effort by some tech giants like Microsoft to import cheap software engineers from India by offering them a patch to U.S. citizenship. I guess this is better than exporting mortgage jobs to India.

DATA POINT: Among residential funders, Prospect Mortgage ranks 26th nationwide, according to figures compiled by National Mortgage News and the Quarterly Data Report. It grew production by 17% in the second quarter. For data inquires drop a line to Deartra.Todd@SourceMedia.com.

MORTGAGE PEOPLE: Mortgage software vendor Ellie Mae recently hired Susan Chenoweth Scarth as senior vice president of marketing.

TWITTER (MORTGAGE) NEWS: Watch my personal Twitter feed where I provide updates on breaking stories. Just visit Twitter and plug in my name. Also check out NMN’s Twitter feed.

COMPLAINTS? NEWS LEADS? Send them to Paul.Muolo@SourceMedia.com.

FINAL WORD: If we go off the fiscal cliff, stocks will tumble and bond prices will spike which means rates will fall once again. Right?

Comments (5)
Sterling needs more volume, not making it on a high margin low volume business that isn't growing in size and taking on tons of new salaries. Prospect hasn't grown retail since 2009, any uptick in volume is seasonal or due to refinance volume. Correspondent is the next step to find some growth and try and make the business attractive enough to sell, IPO or have another PE leveraged buyout. Such a great platform, too bad they can't get it right to grow in retail.

It is sad really that they chose to spend so much on Tech Infrastructure no one likes, and a HQ in Sherman Oaks that is too expensive to house processing staff. That much drag and all the high paid salaries to people that don't generate income is born on the backs of LO's being priced out of the market and unable to gain more market share.
Posted by | Monday, December 03 2012 at 12:01PM ET
they are more leaving the back door than coming thru the front...they are gone thru god knows how many "non producing, over paid, retread, managers here in the south...they had a big windbag by the name of Jose Hildgo...not sure what rock he is under now but i am sure he will turn up spewing his bile somewhere soon..
Posted by greg g | Monday, December 03 2012 at 2:33PM ET
This company is all show and no go. sad really. we have some very hard working indivduals. Too many chiefs spending their day justifying their existence by micro-managing and creating resports, and not enough indians. STOP it already...its a ticking time bomb...
Posted by | Thursday, May 09 2013 at 7:39PM ET
This company is all show and no go. sad really. we have some very hard working indivduals. Too many chiefs spending their day justifying their existence by micro-managing and creating resports, and not enough indians. STOP it already...its a ticking time bomb...
Posted by | Thursday, May 09 2013 at 7:40PM ET
If you look at the $150mm bond offering, they took it out at 10.25%, I could get a Hard Money loan with better terms than that. We will see how long they can last on that life support. If they aren't making money, this will give them 12 months to figure out how. Instead of cutting good for nothing execs, they will trim operations. That is a death spiral.
Posted by | Wednesday, October 02 2013 at 7:27PM ET
Add Your Comments:
Not Registered?
You must be registered to post a comment. Click here to register.
Already registered? Log in here
Please note you must now log in with your email address and password.
MultimediaSee All »