Loan Think

The AIG "counter parties" who received credit default swap payouts from the "government-owned" insurer are an interesting lot. (Its all in AIG's new SEC filing.) Several were key players in the subprime securitization business during the boom years. The group includes: Merrill Lynch, HSBC, Royal Bank of Scotland, and Deutsche Bank, most of which owned subprime lenders and/or provided warehouse lines of credit to non-banks. If they were providing warehouse lines that means they were creating subprime ABS and CDOs too. But the question then becomes: did they purchases credit default swap coverage from AIG to hedge their positions or were they speculating? It's unclear from the SEC filing but it appears that two of the 15 banks who got payouts from AIG were speculating…

If you're one of those people right now who can't stand to open your 401(k) or IRA statement, I'm quite certain you're not alone. It can be frustrating to see the numbers going the wrong way, can't it? You may even think things couldn't be worse. All that hard earned money slipping away. Stop the pity party right here and now. As a loan originator you have the capability to generate income each and every month. Put yourself in the place of a 78-year-old retiree who is counting on the money in that account just to meet monthly bills. That's right - think you're stressed? You can't even begin to put yourself in that retiree's place. He doesn't have the luxury of "just hanging in there" until the market recovers.

With the warehouse lending crisis accelerating mortgage bankers are looking at all their potential options. One advisor to the Mortgage Bankers Association is floating the idea of allowing the 12 regional Federal Home Loan Banks to buy participations in warehouse lines made to non-banks. MBA supposedly has talked to the Federal Housing Finance Agency about the FHLBs and warehouse lending. The GSE regulator, said one official, is aware of the magnitude of the warehouse crisis…

As a reporter, I used the "social media" long before it became known as the social media. Some 20 years ago, I belonged to an online service called Q-Link (an indirect forerunner of AOL). At the time I was a general news reporter.

With home values in the tank it stands to reason that the home equity (second lien) market would be suffering something awful but that's not necessarily the case. Some lenders are still posting decent second lien production volumes, according to the brand new issue of the Alternative Products Quarter Data Report (AP-QDR). People's United Bank of Bridgeport, Conn., funded $168 million of second mortgages in the fourth quarter, a 27% increase in volume. Perl Mortgage of Chicago saw its fundings increase by 32%. For information about the AP-QDR drop a line to: Deartra.Todd@SourceMedia.com…

The Mortgage Bankers Association recently took 13 of its members around Washington to visit officials from the Treasury, Federal Reserve, Government National Mortgage Association, and Federal Housing Finance Agency. The topic: the warehouse lending crisis and its impact on consumers and non-banks. MBA chief John Courson said he thinks that regulators understand the dire nature of the warehouse lending crisis, but immediate help may not be on the horizon. MBA hopes that regulators will cut the risk weighting on warehouse loans but accomplishing such a task could prove difficult…

Are you in fear that you will fail in your business in the next few days, weeks, months?

Loan brokers, it was nice knowing you. Maybe. The Federal Reserve Board may place restrictions on yield-spread premiums because it's too difficult to explain to consumers how they are used to compensate mortgage brokers. The Fed's director of consumer affairs Sandra Braunstein told a House panel this past week that YSPs are a very complex concept and the Fed's attempt at YSP disclosures has not worked well under consumer testing. (For the full scoop see Brian Collins' story in the Monday edition of National Mortgage News). Don't subscribe? Call 800-221-1809...

Bank of America's mortgage chief Barbara Desoer says she spends at least two hours a week listening to loan modification-related telephone calls that come in through the lender's workout unit. "I've heard grown men who are crying on the phone," she told National Mortgage News in an interview Thursday. She said on some days the phone traffic to the loan mod unit is so heavy that callers are issued a reservation number and are asked to call back…

Do you know who the easiest person to sell to is? Someone who already knows you, trusts you, and likes you. Let's face it, people only buy a house every five to seven years in a normal market, and when rates go up very few are refinancing.