Loan Think

A few weeks back I filed a story about how prices for Government National Mortgage Association servicing rights are firming up. Let me clarify: the "asking price" for government servicing has increased but it's hard to tell what the final settlement prices are. One observer of the market told me recently: "GNMA servicing is in huge demand? There's a huge demand to sell it in a traditional co-issue structure, although I think that means there's a huge supply -- not a huge demand. The reports that Ocwen would be out there buying servicing are true (I've checked), if overdone in their implication that there would be a high-paying buyer entering the market. Strong and good to deal with, yes. Highly-priced? Uhhhh, not so much." He added that "vultures are out there," bidding and "are fine to deal with, but don't expect them to be white knights to bail you out on price"…

A few weeks ago I was sitting in a Denny's and what I saw caused me to choke on my coffee. Three rows down in the corner was a loan officer with her laptop taking a loan application. Right there in the Denny's.

In PennyMac's recent IPO filing with the Securities and Exchange Commission the company expresses some concern that "publicity and media attention" concerning litigation and investigations involving Countrywide Financial Corp. may have an adverse impact on its operations. The reason, of course, is that PennyMac's CEO is Stanford Kurland, a former president of CFC. (He worked there for 28 years, starting out as an accountant.) Then again, Mr. Kurland left the company in the summer of 2006 well before the mega lender/servicer ran into deep financial trouble. Mr. Kurland also (smartly) dumped most of his holdings in the company. In fact, two days before company chairman Angelo Mozilo gave him the boot (resigned under pressure) he sold about $130 million worth of CFC stock. In PennyMac's IPO filing the company notes that former Countrywide officers -- including Mr, Kurland -- have been named as defendants in Countrywide-related lawsuits. "However, we cannot assure you that existing or future, if any, investigations or litigation will not generate publicity or media attention or adversely impact" PennyMac's ability "to conduct their respective businesses." The SEC document notes that Mr. Kurland isn't the only current PennyMac employee who used to work at Countrywide. There are others and some are defendants in CFC lawsuits as well…

You might think that because you work with seniors in the reverse mortgage space, that the Internet is not as important as it is to your forward loan co-workers. Think again.

CONGRESS PASSES BILL MAKING IT TOUGHER TO GET AWAY WITH MORTGAGE FRAUD

In today’s day and age every time a new product gets rolled out it comes with promises that this specific product will revolutionize an industry or the entire marketplace. Often times we take this hype with a certain grain of salt and wait to see if these promises will actually deliver. Every once in a while a product lives up to the hype, but far too many times we are left with little results that match the extraordinary expectations of the product launch or new technology offering. What technologies has the mortgage industry promised but have yet to meet expectations?

How do you spell "take out"? Well, if you're a start-up in investor in PennyMac, a mortgage vulture fund launched by former Countrywide president Stan Kurland you spell "take out" using the phrase "initial public offering." Mr. Kurland's firm, PennyMac, has just filed to raise $750 million through a stock sale. The full story is on the National Mortgage News website. Is the future limitless for distressed loans? We shall see. Meanwhile, consumer confidence extended its rebound in May, soaring to the highest level since September with shoppers seeing glimmers of hope for the economy. In other words: better get that IPO done quick...

Health and safety issues regarding one's business should never be far from mind of a company owner. A safe, protected workforce and workplace is conducive to increased sales.

Ditech.com of Costa Mesa, an Internet/telephone direct-to-consumer lender is still advertising like crazy on television. According to an ad I saw on CNBC this week Ditech is offering jumbo loans with rates south of 4.5%. Of course, the ad didn't say anything about points, FICO scores, or equity but you can assume that both will drive whatever rate the company eventually charges the borrower. Ditech.com is part of Residential Capital Corp., which in turn is owned by GMAC Financial Services, which at one point was 49% owned by General Motors which may or may not file for bankruptcy soon. GMAC's other large stake holder is hedge fund giant Cerberus which owns Chrysler, which is in bankruptcy. Cerberus also owned Aegis Mortgage which went BK two years ago. Got all that? Maybe it's time for a scorecard. Ditech started out as a high LTV lender many moons ago. Its founder: Paul Reddam...

This week, BrokerUniverse is rerunning one of Joel Pate’s more popular columns. We think you will enjoy it again.Have you heard the story of the donkey that falls into a well? The story is that the old donkey had been a part of the farmer's life since birth. The farmer loved the donkey and the donkey was a great donkey. One day, the donkey got too close to the well and fell in. The farmer was very dismayed. He knew if he didn't get the donkey out of the well, the much beloved donkey would die and ruin the water well at the same time.