Loan Think

If you thought RESPA reform was dead, think again. On Monday June 27 Housing and Urban Development secretaryAlphonso Jackson will unveil the agency's roadmap for reforming the Real Estate Settlement Procedures Act.A conference call on the matter starts at 2 p.m. EDT…

Late this past week Wayne Lee resigned as chief executive of Ameriquest Mortgage and presidentof its affiliate, wholesaler Argent Mortgage. Together Ameriquest/Argent is the largest subprime/nonconformingfunder in the nation, according to the Quarterly Data Report. In a statement issued by the company, Mr.Lee said he is leaving after 15 years "to take on new challenges and explore new opportunities." Overthe past year there has been constant talk of an Ameriquest-related initial public offering (or a bond offering)but so far it hasn't materialized. Ameriquest and Argent are controlled by Ameriquest Capital Corp. SeeMonday's National Mortgage News for more details. Don't subscribe to NMN? Call: (800) 221-1809...

As we went to press this weekend the yield on the 10-year Treasury was at 3.98%, but on Thursday it dipped aslow as 3.8%. A month ago it would have been hard to imagine that the 10-year would fall below the 4% mark. On Fridaythe employment number came out and it wasn't pretty: new jobs grew by just 78,000 and Federal Reserve watchersnow are of the mind that the central bank may be done -- for now -- raising short-term rates...

If you're looking for an update on the shakeup at the Lehman Brothers - owned Finance Americaread the Monday edition of National Mortgage News. Lehman has put BNC Mortgage chief KellyMonahan in charge of FA. Don't subscribe to NMN? Call: (800) 221-1809...

Lehman Brothers, to some degree, has reorganized its Finance America wholesale subprime unit.Out in the cold is FA's chief executive, chief operating officer and the head of human resources. For the breakingstory see the Monday morning posting of MortgageWire, the daily website of National MortgageNews...

Despite what you may be hearing or reading, it appears that the Treasury Department (read the WhiteHouse) has no plans to cave whatsoever on the issue of portfolio limits for Fannie Mae and FreddieMac. Industry officials tell us that Treasury secretary John Snow is quite engaged in the issue andthat one of his biggest concerns is systemic risk of the banking industry. Officials say he fears that if a meltdownoccurs at Fannie or Freddie it could hammer the nation's depositories because banks hold billions of dollars inGSE securities. Treasury, we're told, is playing tough on GSE legislation and wants those portfolios reduced nomatter what. But the question remains: what is the "magic" number at which you cap the portfolios. Currently,the two hold $1.4 trillion in mortgage assets on their balance sheets...

Now, why the heck would investor Kirk Kerkorian want to own so much General Motors stock for?Could it be he thinks oil is going to come down in price and the SUV market -- which GM is hooked on like a junkie-- will revive? (Don't bet on it.) Or could it be that he really wants a crack at GMAC Residential Mortgage,RFC and GMAC Commercial Mortgage? Just as Standard & Poor's was downgrading GeneralMotors and GMAC to junk status, GM announced it had "restructured" GMAC Mortgage and RFC, placing themunder a new holding company called Residential Capital Corp. The holding company is talking to the threerating agencies about getting their own rating. Why would Mr. Kerkorian want the automaker's mortgage empire? Maybebecause it earned $1.1 billion last year. Of course, GMAC Commercial (which is not part of the new holding company)soon may be sold to investment banker Lewis Ranieri and his partners. Then again, the commercial unit hadthe weakest earnings of three mortgage groups, just $204 million compared to $629 million for RFC and $275 millionfor GMAC Residential. For the full story on GM/GMAC's downgrade to junk, see Bonnie Sinnock's story in Monday'sNational Mortgage News...

When in doubt bring in the experts. The Federal Home Loan Bank of Seattle has hired Black Rock Financialand a firm headed by former Comptroller of the Currency Eugene Ludwig to assist it in getting itsfinances and management practices in order. Working on the account for Black Rock is the Treasury Department'sformer Fannie Mae/Freddie Mac expert, Peter Fisher. Visit the National Mortgage News websitefor the full story...

When the going gets tough, the tough members of the Federal Home Loan Bank of Seattle start redeemingtheir stock. A glance at trading records reveal that Seattle members redeemed one-million-plus shares of classB(1) stock in the fourth quarter compared to just 123,196 in the first. The troubled bank's five nonmember directors-- with the help of a law firm the GSE will not identify -- are investigating two directors whose institutionsmay have redeemed stock (in the fourth quarter) based on inside knowledge they may've had. For more updates onthe scandal see Monday's edition of National Mortgage News...

Testifying before the Senate Banking Committee this past week, Astoria Federal CEOGeorge Engelke asked a very pertinent question aboutthe meltdown of the FHLB Seattle: "Where on earthwas the regulator?" The regulator here would be the Federal Housing FinanceBoard. We asked the FHFB's spokesman if the agency was investigating allegationsthat three FHLB members might have been privy to inside information about the Seattle bank's condition when, inthe fall of last year, the three requested stock redemptions. The spokesman said the agency itself is not lookinginto the matter, but has asked the bank to conduct an internal review. For more details see Monday's edition ofNational Mortgage News...