Loan Think

This just in: investment banking sources say both Bank of America and Wells Fargo are out of therunning for GMAC. (GMAC's assets include GMAC Residential, GMAC-RFC, Homecomings, theauto finance business and other units.) A GMAC spokeswoman told National Mortgage News that justbecause the company is exploring a sale, that doesn't necessarily mean one will happen. For the complete storysee Monday's NMN. Don't subscribe? Call: (800) 221-1809...

Reading the tealeaves of mortgage banking is never easy. I remember back in 2000 when the industry was struggling.That summer I asked Countrywide chief executive Angelo Mozilo how business was. His answer was bluntand to the point: "It stinks." Then in 2001 production doubled to $2 trillion and in 2003 the industryfunded an eye popping $3.9 trillion. (Figures courtesy of the Mortgage Industry Directory.) So, what dothe tealeaves say right now about the coming year? The good news is that lenders aren't complaining about volumes.(In 2005 the industry will fund close to $3 trillion.) The gripe is about the flat yield curve and profit margins.One non-conforming lender told us that whole loan buyers (Wall Street, among others) aren't paying up for productanymore. This executive, requesting his name not be used, said that through November investors had bought so manyloans that their balance sheets are "full up." He added that some funders are having what he called "aninteresting" fourth quarter. A small California lender we know said that until November his shop was earningmoney, but now investors aren't paying up and his firm is in the red. If the market doesn't turn by February he'sprepared to trim staff drastically. Meanwhile, subprime giant Ameriquest laid off 800 in November, and Countrywideis trimming staff by 300. On the other hand, government figures show strong industry employment -- but those numberslag by 60 days…

Maybe the immediate future of the industry doesn't look so gruesome after all. As we went to press, the yieldon the 10-year Treasury (which mortgages are pegged to) was 4.42% and there was hope in the market that the FederalReserve's string of interest rate hikes might be coming to an end. In other words, we're headed for a recession,which means the Fed is going to start cutting short-term rates again. Of course, predicting where rates are headedis like picking the ponies…

This just in: the third quarter was a blowout for the industry. According to National Mortgage News'just released 3Q edition of the Quarterly Data Report, mortgage bankers funded $924 billion in the thirdquarter, the industry's best showing in two years. Then again, many lenders are glum about prospects for next year,though some executives tell us margins are improving a bit, a little bit, that is.

Did the press bury the lead in regard to Fannie Mae's conference call on Thursday? In case you missedit, Fannie said it had discovered yet more accounting errors and had hired the "Superman of Accounting,"former MCI CFO Robert Blakely to help save the day. Buried in Thursday's Securities and ExchangeCommission filing is the revelation that the New York Stock Exchange asked the SEC to change the standardsby which it should delist companies that do not file timely earnings statements. (That would be Fannie, which hasnot reported since 2Q 2004 because of the incompetence/ignorance of former management.) Most media outlets of importanceignored the delisting aspect of the filing. In case you're wondering, Fannie is a primo candidate for delisting.The elephant in the room that no one is talking about is this: why is the NYSE going out of its way to help FannieMae? One investment banker told asked us this: "Why is there one standard for Fannie and one for everyoneelse?" Good question…

According to National Mortgage News' brand new Loan Officer Report (LOR) the top LO inMaryland is Tomeka Harris of Metropolis Funding in Baltimore. Tomeka originated $53 million in loanslast year. The LOR has details on the nation's top LOs. For more information on the product contact: Elizabeth.Washington@SourceMedia.com…

Short sellers are loading up on mortgage - related stocks. In mid -October, speculators increased their shortpositions against Fannie Mae and Freddie Mac by 22% and 20%, respectively. Shorts against NewYork Mortgage Trust spiked by 82%. The comparison is to short positions at mid -September...

Which two finalists are vying for General Motors Acceptance Corp? Hint: one's a bank, the other is not.For the full story read the Monday edition of National Mortgage News. Don't subscribe? Call: (800)221-1809…

By now we've heard the stories about several loan brokers earning $1 million a year in commissions -- especiallyhigh-producing, California-based brokers. Recently we heard about a whopper of a commission paid and so we're passingit on. Supposedly, on a recent alt-A jumbo transaction in California, a broker made a fee of $35,000. That's right-- $35,000 on one single loan. We assume the mortgage was north of $1 million…

Is Maryland's most prosperous county looking to ban mortgage brokers? According to the Maryland MortgageBrokers Association, Montgomery County is considering legislation that would -- among other things -- prohibitmortgage professionals from making loans that include the financing of single-premium credit life insurance;provide for upfront points, fees or prepayment penalties; and provide compensation paid directly or indirectlyto a mortgage broker from any source. The trade group believes the law would, more or less, put an end to mortgagebrokering in the county. MMBA is urging its members to write the Montgomery County Council. Here's a tip: MontgomeryCounty executive Douglas Duncan (not to be confused with the mortgage economist of the same name), a Democrat,is running for governor next year. Recently Maryland passed a law prohibiting an individual from acting as a mortgageoriginator (broker or banker) unless he/she has a license or a valid exemption. See Monday's edition of NationalMortgage News for more details. Don't subscribe? Call: (800) 221-1809…