Loan Think

There are plenty of things you can do which will allow your business to stay running in the near term.

It's all about Europe, isn't it? The stock market tanked in May and began what looked like a nasty skid Tuesday morning only to turn positive. The yield on the 10-year Treasury is at 3.28% and I'll repeat what I've been saying for several months: I don't see interest rates, the mortgage variety in particular, going anywhere this year. Investors will continue to buy U.S. Treasuries because there appears to be a (somewhat) widely held belief that the U.S. government will do whatever it takes to save our economy. And if employment comes back, the home buying outlook could be quite decent. Then again, this morning computer giant Hewlett Packard said it would cut 9,000 jobs. That's potentially 9,000 workers with a mortgage, though if you multiply the jobs number by the U.S. home ownership rate of 65% it comes to a mere 5,850. HAMP servicers, start your engines...

With all the attention recently on the effects of the tax credit for first-time homeowners, it's easy to forget there's one on the multifamily side as well. The Low Income Housing Tax Credit, after a bad couple of years, is poised to return to its former status as the premier production conduit for affordable multifamily housing.

Everyone should be familiar with the cliché "so much to do, so little time." And all of us have experienced days at work where we just seem to get bogged down by the number of things that are on our plate.

As we all know, the White House (and most Democrats) have punted on the Fannie Mae/Freddie Mac issue until next year. I would assume that once the "What is the Future of the GSEs?" discussion begins in earnest early next year, some Republicans will want to throw the mortgage interest deduction overboard too. Indeed, The Cato Institute's Mark Calabria today on CNBC raised the issue of killing the deduction, arguing that it's really an incentive for Americans to take on more debt. If Democrats go along with the idea of killing the deduction it likely will be in the name of reducing federal deficits. Meanwhile, some stock analysts are getting a bit bearish on Banco Santander, the Spanish bank that controls Sovereign Bancorp of Pennsylvania, one of the largest remaining thrifts. Not only is Sovereign an active residential lender in the Mid-Atlantic States, it has an active warehouse lending division. We're not sure how active the group is because Santander's executives seem to have a policy of not talking to the press at all about what Sovereign is up to...

I own an Apple TV. The settings allow you to watch your pictures and at that same time listen to your favorite play list.

This past week rumors were floating around that PennyMac might be working on a securitization, perhaps monetizing some of the nonperforming product it's been selectively purchasing over the past year. Several weeks back, Arch Bay Capital pulled off a deal, but supposedly didn't make much money on it. (Time will tell.) I could not nail down the securitization rumors but I did unearth a PennyMac auction (private) of roughly $98 million in loans. Executives that play in the NPL space believe that if home prices really have firmed up (have they?) we might be seeing more sales by firms (like PennyMac) that bought on the cheap last year. If you hear of any more NPL sales drop me a line at Paul.Muolo@SourceMedia.com...

If you're wondering why the sale of nonperforming loans is picking up steam this year the answer is quite simple: firms that were smart enough to buy last year (some at dirt cheap prices), want to book their gains while they can. "If you can make a return of 10% by selling right now, why not do it?" one investor told me. In the nonperforming (NPL) loan space we hear that Goldman Sachs & Co. recently bought a few NPL pools and that a unit of Cerberus Capital is eyeing deals. Cerberus, of course, still owns part of GMAC Financial/Ally Financial, which in turn controls Residential Capital Corporation…

Some of the best ideas come from "outside" the mortgage industry-by reading other publications or just simply brainstorm with other business owners.

The warehouse lending picture has improved dramatically over the past 12 months, although there is nothing "easy" about obtaining a new line. For the banks that make credit available to nonbanks the profit margins are still very handsome, or so I'm told. But has warehouse credit to jumbo providers improved during this time? I'm told the answer to that question is no, or very little. If you have any insight on the jumbo warehouse picture, drop me an email. Meanwhile, the new home sales figures are out and April looked like a banner month. Of course, (as we all know) the 14.8% jump in activity is being given to the $8,000 tax credit (and another 'move up' credit) expiring and sales being artifically added to April. My guess is that May and June will be strong months too. But what if the employment picture really does improve and more workers decide to take the plunge because rates are low and homes cheaper than they've been for 10 years? It's something to think about…