Loan Think

There's an interesting little story concerning buybacks making the rounds (that I can't confirm) and it goeslike this: midsized lender has been getting stung by buyback requests. The primary owner has staved off the problem,somehow, for months but the day of reckoning is approaching. His firm has a decent net worth but the buybacks itfaces would put him out of business. So what does he do? He plans on bankrupting his current mortgage firm, shiftingall the assets over to a new one. Sound crazy? One banker I ran it by had this to say: "Not crazy at all.Makes perfect sense to me. Why let the greedy Wall Street bankers making billions of dollars a year take you down?"Stay tuned...

This just in: Mortgage Lenders Network of Connecticut issued a short statement early Friday afternoonsaying it is still actively funding and servicing loans. The question, of course, begs: why did it issue such astatement? Rumors were circulating about the company in regard to -- shall we say -- its future. One Californiamortgage executive told us he recently tried to recruit a "team" from MLN. At press time, MLN was notelaborating about the release...

Now that New York attorney general Andrew Cuomo has subpoenaed mortgage-related documents from BearStearns, Deutsche Bank and Merrill Lynch, some of you might be wondering: whatever happened tothose two subprime-related hedge funds that Bear closed this summer? The short answer is they are kaput but couldbe back in the news shortly. The one thing none of us knows (and correct me if I'm wrong and I know there's readersout there who will) is who, exactly, the creditors of these two funds are. Bear has some sharp attorneys who aretrying to liquidate the funds through the Cayman Island courts. Do you know what that means? Bear doesn't haveto disclose who the creditors are — or much else for that matter. The reason companies go to the Caymans is this:you don't have to disclose much of anything. (I should've went to law school.) The two funds are called High-GradeStructured Credit Strategies Enhanced Leverage Fund and High-Grade Structured Credit Strategies Fund.The reasons the two funds might be in the news again is this: Bear says in a recent SEC filing that it has been"contacted by and received requests for information and documents from various federal and state regulatoryand law enforcement authorities" regarding the two funds. The phrase "law enforcement" would meaneither the AG's office or the Federal Bureau of Investigation. If you have any information regarding thismatter and/or how Bear’s trading desk and warehouse division worked in tandem the past few years drop me an e-mailat Paul.Muolo@SourceMedia.com. All e-mails will be keptconfidential unless you don't want them to be…

This just in: we understand that two broker-dealers are taking a close look at Option One Mortgage Corp.OOMC is owned by tax giant H&R Block. Meanwhile, Millennium Funding Group of Vancouver, Wash.,is about to be sold…

Stop the presses! GMAC-owned ditech.com has pulled the plug on its "frustrated banker" TV ads. Gone is the rumpled looking loan officer (loan broker, says some) whose tag line was: "Lost another loan to ditech!" The Internet/call center lender is working on new ads but isn't giving away any story lines. For more details see Monday's National Mortgage News...

It seems the revolving door to the executive suite is spinning faster at plenty of lenders these days. The CEOof a top-ranked subprime firm is on her way out. To find out who, read Monday's National Mortgage News.Don't subscribe? Call: (800) 221-1809. Meanwhile, Sean Wilson has departed as the head of productionat Home Loan Center, the mortgage banking arm of LendingTree. We're told the departure of Mr. Wilsonand another executive could be related to a class-action lawsuit filed against LT/HLC on behalf of consumers. Thesuit charges that there isn't really any competition for the business of consumers at LendingTree and that thecompany is using the site to feed leads to HLC. LendingTree has denied the civil allegations...

This just in: Lehman Brothers has picked a new CEO for its BNC Mortgage unit. To find out whoread Monday's National Mortgage News...

We're told that even though production volumes are slipping, some account executives are still making a killing."The compensation of loan officers is too much," one warehouse official said. "AEs are making 40to 50 basis points on subprime," he said. "Those numbers need to come down"...

The Colorado attorney general is expected to subpoena at least 10 mortgage firms in the state -- mostly loanbrokers -- as part of an investigation into deceptive consumer advertising practices. Depending on what the AGfinds it is possible that fines could be levied against the companies. For the full story see the Monday editionof National Mortgage News. Don't subscribe? Call: (800) 221-1809...

Private-equity firms are starting to sniff around the mortgage business, investment banking sources told us recently. We understand that nonpublic investors are not only looking at subprime lenders, but vendors as well. Early last week The Carlyle Group and its partners took private Open Solutions, a financial services technology firm that is in the loan origination software space...