Loan Think

If there is a single transaction that's causing sleepless nights (as in possible jail time) for certain formerFannie Mae officials, it's the one that occurred back in 1998. It was in that year the GSE -- then headedby Franklin Raines -- paid $27 million in bonus money, all of it tied to Fannie reaching its earnings goals.How did Fannie "make its numbers"? Answer: By deferring $200 million in expenses to later years. Notonly did the executives "make their numbers," they made 100% of the bonus goal. (At some companies bonusesare paid on a sliding scale.) In case you're wondering, as one seasoned investment banker told us: the manipulationof earnings to pay bonus money is a crime. "Among those who have left, there is a great amount of angst overthat transaction," said one former Fannie executive, requesting anonymity. Why would Fannie Mae officialscook the books to make their bonus goals? Because the stock price of the company since the Raines era began hadgone nowhere and their options weren't worth a whole lot. Keep in mind that to date nothing has been proved andall this might be explained away...

This past week the statistical arm of National Mortgage News received three requests from WallStreet firms asking for our exclusive quarterly subprime rankings. Three. (That's the beauty of having an editorwear both a news and a data hat.) So, does this mean that there could be a ton of merger activity ahead in thesubprime space? Maybe, maybe not. One thing's for certain, several subprime residential REITs saw their share priceshit new 52-week lows this past week. See below and upcoming stories in both NMN and Origination News…

National Mortgage News is putting the finishing touches on its brand-new "Loan OfficerCompensation and Production Report," a new database/white paper on LOs. The product includes adatabase of close to 1,000 LOs. For more information contact: Elizabeth.Washington@SourceMedia.com…

It seems as though disasters bring out the best in Americans. Down in Baton Rouge where the housing stock isin (mostly) decent shape, speculators are buying up available homes like they're going out of style. Unity Mortgageof Atlanta, which has an office in Baton Rouge, says its loan officers have been approached by Realtors that haveinvestors who are looking to buy multiple homes and need financing -- zero-down financing that is. Unity doesn'twant any part of it, company president Jack Quan told National Mortgage News. For the fullstory see Monday's edition of NMN Don't subscribe? Call: (800) 221-1809…

Will the human and economic calamity caused by Hurricane Katrina force the Federal Reserve to stop—atleast for a little while—its interest rate hikes? It's hard to say but some speculators are placing their betsthat the short-term hikes are over. This could be good news for residential lenders that have seen their profitmargins squeezed. As we went to press, the yield on the 10-year Treasury was at 4.03%…

Interest-only loans accounted for 26% of all mortgages funded in the second quarter, according to exclusivesurvey figures compiled by National Mortgage News and its affiliate, the Alternative ProductsQuarterly Data Report . Mortgage bankers originated $213 billion in IO mortgages during the second quartercompared to $141 billion in the first. Meanwhile ARM production is at an all-time high. Don't get the AP-QDR? ContactDeartra.Todd @SourceMedia.com ...

Our hats are off to Countrywide Home Loans, which was not only the No. 1 ranked funder (once again) inthe second quarter, but it achieved a market share of 14.46% -- the first time ever that a company broke 14% sinceNational Mortgage News and the Quarterly Data Report began collecting origination figuresa decade ago. Using the correspondent channel, Countrywide acquired $53 billion in loans, far ahead of the No.2 ranked correspondent buyer, Wells Fargo Home Mortgage. Now, can Countrywide get to 20%?...

Well, it's finally ready: National Mortgage News' new "Loan Origination Systems Software"report. The new LOS research report gives detailed information on what lenders think of LOS systems and what vendorsthink as well. For more details on this product e-mail Elizabeth.Washington

This just in: Credit Suisse First Boston has extended the expiration date on its option to buy subservicerSelect Portfolio Servicing. The option to buy SPS -- formerly known as Fairbanks Capital -- was originallyset to expire on July 31...

It seems the old gang at Cohane Rafferty Securities, a once - prominent deal maker in mortgage land,is drifting away. Cohane managing director Ed Elanjian recently joined Lehman Brothers' AuroraLoan Services. (Cohane was bought by Lehman a few years back.) Also departing: Tom Donatacci who returnsto GMAC Mortgage, hence, he came. See upcoming stories in National Mortgage Newsand on MortgageWire…