Loan Think

It’s earnings season for the nation’s publicly traded depositories and it appears that Sandler O’Neill is slapping “sell” signs on a handful of of the banks it covers including: M&T Bank Corporation, Home Bancshares, Zions Bancorp, and BB&T Corp. Three of the four -- Home Bancshares being the exception -- rank among the nation’s top 60 residential lenders, according to the Quarterly Data Report. Meanwhile, not all mid-sized depository-based lenders are suffering. Hudson City Bancorp of Paramus, N.J. – which funds loans through both its branches and correspondent mortgage bankers – saw its 2Q earnings increase by 16% to $128 million. Company president Ronald Hermance noted that residential loan charge-offs are increasing at the thrift but said losses have been modest since Hudson City keeps its LTV ratios low...

The $64,000 question in the sales industry always has been what makes a good sales person. Is it nature or is it nurture? And what traits can company managers look for in finding their next top performer?

In last week’s blog, I talked about how Google was taking aim at Microsoft by announcing that it was developing its own computer operating system Google Chrome OS. Google claims that the Chrome OS will be entirely focused on the Web. Microsoft responded by surprising Google and the industry with the announcement that Office 2010 will include, among many new features, an online web version of Office 2010 apps that will be free.

ARIZONA REQUIRES LOAN MODIFICATION BROKERS TO BE LICENSED AS WELL AS THE LOAN OFFICERS IN 2010

Vulture fund managers and ‘scratch and dent’ servicing specialists are still talking about American General Finance Corporation’s planned sale of $1.6 billion in non-prime whole loans to Credit Suisse which will issue securities backed by the liens. One investor noted that over the years AGFC had a reputation of paying cash for the whole loans it bought in the secondary market. (Some of the loans came from AGFC’s affiliate, Wilmington Finance.) Back in 2008 AGFC bought a $1 billion pool of non-prime loans from Banco Popular, noted one source, and overpaid for the product. The Banco Popular pool, as might be expected, hasn’t performed all that well...

The state of New Jersey has amended its Mortgage Stabilization and Relief Act, adding a provision allowing a delinquent borrower to pay nothing during his/her forbearance period. The forbearance period can last up to six months but only becomes effective after a foreclosure action is filed. The law firm of K&L Gates said the amendment is “looking like a smart economic move” in New Jersey...

This week, BrokerUniverse is rerunning one of Joel Pate’s more popular columns. We think you will enjoy it again.

The biggest news of the past week? That would be the disclosure by National Mortgage News that American International Group is (more or less) in the process of liquidating its consumer finance affiliate, American General Finance Corp., which has been around (so its website says) for 85 years. Of course, AIG isn't talking about what exactly it's up to but we know this: Credit Suisse is buying $1.6 billion in AFGC nonprime whole loans. It then plans to turn around and issue securities. One executive at CS heralded the deal as a revival in the non-government private label market. My only thought is this: yeah, right. AIG is owned by Uncle Sam, which has committed $180 billion in loans and assistance to AIG. If Uncle didn't own most of AIG do you think CS would've done the deal? As for the liquidation of AGFC, the deal with CS is not being portrayed in the general business press as such but let's face it: AGFC closed 180 branches, isn't making new loans and it's in the nonprime space. And it's owned by AIG. The company has always been secretive about both its lending and servicing numbers, rarely disclosing them publicly. For the full story see Monday's NMN. Don't subscribe? Call 800-221-1809...

Perhaps, I’ve underestimated PennyMac’s ability to get new business. As we reported yesterday Stan Kurland’s firm will be the servicer on $1.6 billion of non-prime loans that American General Financial Services is selling to Credit Suisse. CS plans to issue securities backed by the loans. Of course, the obvious question (for those who work in servicing) is this: why would CS use PennyMac when it already has its own servicing company, Select Portfolio Services? A CS spokesman has yet to answer my question but one observer said it may be a capacity issue. He added that “PennyMac is a ‘combat’ servicer.” We know this about PennyMac: it has plenty of office space in Southern California and now – thanks to the AGFS/CS deal – it can begin putting people in those empty cubicles. I assume this contract will be among the highlights included in PennyMac’s IPO road show...

This weekend I took my wife, son and a friend to the Orioles versus Yankees baseball game. I personally am not a big baseball fan (to me it's like watching paint dry). But this is a big rivalry and we had great seats.