Loan Think

I was fortunate enough to be invited to ILOG’s DIALOG 2008 Conference about a month ago. I have to say there was a true sharing of ideas. As a business rules management company ILOG services a lot of industries outside of mortgage, but nonetheless all the buzz was about the business impact of service-oriented architecture.

THIS JUST IN: The head of whole loan trading at one Wall Street firm/bank departed this past week. His deputy left in late January. To find out which firm and who, read the Monday edition of National Mortgage News. Don't subscribe? Call: (800) 221-1809...

At a time when many distressed homeowners would like to receive a reassuring message from the government, theykeep hearing on the airwaves that the Bush administration is not going to help "speculators."

I remember watching reruns of Agent 86 Maxwell Smart, wonderfully portrayed by Don Adams, bungle his way through one case of espionage to another. He and Agent 99 would provide great slapstick humor, countless laughs and always manage to save the day even though Smart was clearly anything but. This June Steve Carell and Anne Hathaway will revive both rolls on the big screen. I hope the movie lives up to its TV predecessor.

The Native American Housing Assistance and Self Determination Act is the most important American Indian housinglegislation ever to be passed into law. Its reauthorization by Congress will be a key step in helping tribes getoff the dispiriting Government dole and use their sovereignty to determine their own destiny.

For three months now a source familiar with the situation has been telling us that Carrington Capital Management -- which bought the servicing platform of now-defunct subprime giant New Century Financial Corp. -- has been having (shall we say) some financial challenges. This past week it was reported that Carrington, the brain child of former Salomon Brothers executive Bruce Rose, is trying to persuade investors to lend it $200 million to replace its current bank lines. The obvious question is this: Have his current lenders become "risk adverse"?...

So much for the status quo. We’ve switched it up here at SourceMedia. Things have changed at Mortgage Technology Magazine. The same-old, same-old can be boring after all.

Let's start with the funeral -- no, not the Bear Stearns funeral but we'll get to that in a minute. This past week the family of Roland Arnall laid the former subprime king to rest at the Mount Sinai Memorial Park in Los Angeles. Attending the funeral were politicians (and former politicians) Arnold Schwarzenegger, Gray Davis, and Antonio Villaraigosa. A former account executive at Argent Mortgage had this to say: "Some say he was a wolf in sheep's clothing or maybe he just turned a blind eye to all the money that was flowing in -- and made up for it doing deeds for the greater good of mankind. We may never know. But what is known is the influence he made on the political landscape and to the lives of many of his employees. I felt like I was at a political rally with the amount of politicians that came to pay their respects. You could say there wasn't a dry eye in the place -- but it wasn't necessarily for passing of 'The 'Father of Subprime' but for our own futures." The AE told us that he was recently let go by Argent's new owners, Citigroup...

First, let's start with some good news. According to the brand-new issue of the Quarterly Data Report, six of the nation's top 20 lenders actually saw residential originations increase in the fourth quarter. The six are Chase Home Finance, Taylor Bean & Whitaker, U.S. Bank Home Mortgage, Flagstar Bank FSB, Amtrust Bank and Branch Banking & Trust. To see their numbers order the Quarterly Data Report. Send an e-mail to Deartra.Todd@SourceMedia.com...

On Friday the House Oversight Committee had its crack at Angelo Mozilo, Stan O'Neal and Charles Prince, considered by some to be the three horsemen of the subprime apocalypse. (In the Bible there are four horsemen but who's counting?) The witnesses, along with the compensation chiefs of Countrywide, Merrill Lynch and Citigroup, respectively, came into the Rayburn hearing room through the back door, thus avoiding the press. However, once seated, 10 different photographers began clicking away as the men were sworn in. As might be expected, committee chairman Henry Waxman of California raked Mr. Mozilo over the coals for his insider stock sales (an estimated $400 million over seven years). Rep. Waxman, among other things, was interested in CFC's decision in November 2006 to use $2.5 billion in capital ($1.5 billion of it borrowed) to buy back its stock in the open market. This decision was made just as Mr. Mozilo began speeding up his stock sales (after exercising options). Mr. Mozilo, who kept a calm demeanor throughout much of the hearing, said there was no connection between the corporate buyback and the acceleration of his stock sales. Harley Snyder, a CFC board member in charge of compensation, noted in his testimony that Mr. Mozilo was scheduled to retire from the company in late 2006, saying, "The individual we thought would succeed Mr. Mozilo as CEO had left the company." Mr. Snyder forgot to say that the individual, Stanford Kurland, did not leave on his own accord. He was pushed. And I would guess Mr. Kurland is sitting poolside these days, sipping a cocktail, and thanking Mr. Mozilo and the board for kicking his butt the heck out of the company...