Loan Think

Net branch operator All Fund Mortgage of Washington state has lost another top officer. This time it'sPerry Stiles, executive director of branch operations. Managers say Mr. Stiles -- who departed lastweek -- helped All Fund start its branch division eight years ago. In February, AFM was sold by a private individualto five partners including Chris Dunn who now serves as its president. (A source said another partner inthe deal is David Syme of David M. Syme Consulting.) AFM has been taking up to three weeks -- andmore -- to pay some of its branch managers on deals. (Typically, it used to pay in 48 hours.) For an update onAFM see the Monday edition of National Mortgage News. Don't subscribe? Call: (800) 221-1809…

Are hedge funds the only bidders out there making serious offers for subprime firms? Is Wall Street still interestedin wholesale franchises or have they had it? For answers to these and other questions see the Monday edition ofNational Mortgage News. Don't subscribe? Call: (800) 221-1809...

Countrywide Financial Corp. is creating a new 15-person unit in Calabasas, Calif., to review the entirecompany's processes from top to bottom, one mortgage executive told us late this past week. "They are goingto review everything," said the executive, requesting anonymity. Is the soup-to-nuts review a precursor toa sale? Probably not -- even though CNBC's court jester Jim Cramer seems to think Merrill Lynchshould buy Countrywide. What did Countrywide have to say about the formation of the new unit? Its spokeswoman hadnot called us back at press time...

THIS JUST IN: The Federal Deposit Insurance Corp. is holding an invitation-only summit on subprimeforeclosures on Monday, April 16. Invited speakers include former Salomon Brothers vice chairman LewisRanieri, Richard A. Uhlig, CEO of Morgan Stanley Bank and Larry Litton ofLitton Loan Servicing, among others. The media was not invited…

Despite reports to the contrary, Sunset Direct Lending is still in business. Company CFO Frank Frazzittatold us the wholesaler hopes to start funding loans possibly next week. But Mr. Frazzitta said there is one problem:Wall Street investors are paying just 95 (par is 100) for loans right now. "It's ridiculous," he said."They're trying to crush us." He was particularly incensed by one investor that offered a bid of 95 ona mortgage where the customer had already made two payments. "They offered 95 and there's nothing wrong withthe loan," he said...

THIS JUST IN: HSBC Mortgage Services of Ft. Mill, N.C., is exiting the subprime correspondentchannel. An HSBC spokeswoman confirmed the move, but noted that another HSBC division, HSBC Corporate, InvestmentBanking and Markets will be taking over that chore. She called it a "recent decision"...

What exactly are criminal investigators looking at in regard to New Century Financial? One source familiarwith these matters said investigators are focusing on some of its loan trades. "Typically, they would do atrade before the quarter's end," he said. The key to such trades, the source noted, is "counter-party"risk. Counter-party risk means there's a company on the other side of the trade -- typically, an investment bankingfirm. Another item being looked at is how much cash New Century said it had on its balance sheet. What New Centurysaid it had -- and what it really had -- is a whole different matter. Meanwhile, as we went to press this weekend,the company's shares were trading under the symbol 'NEWC.PK' on the pink sheets. On Friday the last read was: up$1.01 to $2.36 -- a stunning gain of 75%. Some rumors were circulating that New Century was working on a pre-packagedbankruptcy plan...

THIS JUST IN: Early Monday morning it appeared that New Century Financial Corp., the nation'ssecond largest subprime funder, was about to go down the drain -- the bankruptcy drain. In an SEC filing thenon-depository/REIT revealed that Morgan Stanley had pulled out of an agreement to provide $265 millionin (essential) financing and that several other Wall Street firms were declaring the non-depository in defaulton warehouse lines or repurchase agreements. Barclays informed New Century that it had pulled its rightto service loans. If New Century fails -- which seems likely -- it will be the largest subprime collapse in U.S.history. In trading Monday morning its stock had been halted. With its production financing drying up, the onlycash flow the company can generate will come from its $40 billion servicing portfolio. But if firms like Barclaysterminate servicing rights, its demise will be swift...

THIS JUST IN: Yet another large subprime lender is having trouble and appears to be on the verge of doingsome employee house cleaning. To find out which lender see the Monday edition of National Mortgage News.Don't subscribe? Call: (800) 221-1809...

Let's start off this weekend's column with some, well, good news. It's out there -- you just have to dig for it. (And God knows the industry needs it.) So here, goes. On Wednesday, the share price of private-label funder/servicer PHH Corp. hit a new 52-week high: $30.53. The company isn't exactly current on its earnings but it's working towards it…