Loan Think

When it was first learned that Fannie Mae would make a $70 million "floor bid" to buy the servicingplatform of the bankrupt Conseco Finance, all the mortgage world gasped. Truth be told, Fannie didn't reallywant to enter the servicing niche. The firm claimed that it was trying to protect its interest in $10 billion worthof bonds backed by manufactured housing loans, bonds that Conseco was servicing. Last week, it was revealed thatFannie wanted a partnership called Berkadia to get control of the servicing platform. Why? Because Berkadia"accepted" Fannie's "servicing protocols." According to one source familiar with the matter,if the contractual servicing fee on the securities is changed (as well it could be), the bond issuer (the firmprotecting Fannie's investment) might "be off the hook" on guaranteeing the securities. In other words,if Fannie feels protected in regard to Conseco because it has bond insurance coverage, that coverage -- at leaston some Conseco MH bonds -- could disappear. This means that Fannie could take a sizeable writedown on the $10billion in MH bonds it owns. How sizeable? Maybe as high as $200 million, says our source. As this weekend columnwent to press on Friday, a Fannie spokeswoman said she couldn't comment on the situation (though the firm may commentnext week)...

Bill Starkey Sr. of AccuBanc fame is back. Sources say Mr. Starkey -- with assistance from GMAC-RFC-- is the buyer of Matrix Bancorp's wholesale division. (In a recent press release, Matrix said it had abuyer for the unit, but declined to name the firm.) A few years back, Mr. Starkey sold AccuBanc to NationalCity and "retired." Sources say the money he made on AccuBanc was burning a hole in his pocket andhe couldn't sit still. (See National Mortgage News on Monday for full details)...

Are some loan brokers millionaires? According to a recent Wall Street Journal article, in 2002,some brokers earned north of $1 million and a few almost $2 million. The WSJ also cited mortgage brokerageresearch done by National Mortgage News, which we greatly appreciate. But are brokers really loaded?According to a recent posting on NMN's "Grapevine" Internet site, the average broker is making$60,000 or less. Then again, one broker posting on Grapevine boasted 2002 earnings of $400,000. Of course, theGrapevine is totally anonymous and there is no way of verifying any of the information posted...

Fannie Mae caused a bit of a stir late last week when it confirmed that it had made a $70 million "floor"bid on the servicing platform of Conseco Finance, the largest player in the manufactured housing space.(Conseco's parent is in bankruptcy.) A Fannie spokeswoman quickly shot down speculation that the congressionallychartered mortgage giant wants to become a servicer. And of course, readers of National Mortgage Newsare aware that a few years back Fannie was talking to Alltel about buying its mortgage servicing operation.But hey, Fannie doesn't want anything to do with servicing, right? Yes, that's right. That's what the company said.Got that? Perhaps, Fannie fears that a new servicer could jack up the servicing fee on the underlying loans/ABS?(Roughly, 70% of Fannie's $10 billion in MH ABS is serviced by Conseco.) Perhaps, Fannie is concerned that Conseco'sservicing will fall apart in the hands of a new owner. One mortgage banker told us that if Fannie is so concernedabout the quality of the servicing, "I can recommend 10 good subservicers including HomEq, Wilshire,and a few others."...

In the fourth quarter, subprime giant Household International sold $3.8 billion worth of B&C servicingrights. The secretive Household, which is in the process of being sold to foreign bank HSBC Holdings, wouldnot disclose the price it received for the servicing or the identity of the buyer...

After years of trying (but not trying too hard), Alltel finally sold its mortgage/financial servicesunit this past week. Fidelity National paid a little more than $1 billion for the technology division. Atleast four firms looked at the unit over the past few months, sources say. One source said Fannie Mae "wasnosing around the deal." But a Fannie Mae spokesman said to the best of his knowledge the secondary marketgiant was not a suitor. "We may've been asking some questions because so many of our customers are on thesystem, but we weren't a bidder," said a Fannie Mae spokesman,,,

After years of trying (but not trying too hard), Alltel finally sold its mortgage/financial servicesunit this past week. Fidelity National paid a little more than $1 billion for the technology division. Atleast four firms looked at the unit over the past few months, sources say. One source said Fannie Mae "wasnosing around the deal." But a Fannie Mae spokesman said to the best of his knowledge the secondary marketgiant was not a suitor. "We may've been asking some questions because so many of our customers are on thesystem, but we weren't a bidder," said a Fannie Mae spokesman...

What future is there for the Mortgage Partnership Finance program if the examination of the bank(s) promotingit is weak? It's an interesting question. Although the MPF program is not mentioned by name, a draft copy of aGeneral Accounting Office report raises questions about the Federal Housing Finance Board and itsability to examine the 12 FHLBs it regulates. Critics of the MPF and FHFB also might read into the report thatcurrent FHFB chairman John Korsmo has politics in mind (not that there's anything wrong with that) whenit comes to FHLB public interest directors. The percentage of public interest director appointees who made politicaldonations prior to their initial appointments now stands at 75% (under current FHFB chair Korsmo) compared to 56%for former chair Bruce Morrison. The American Banker reported on Friday that two FHFB boardmembers plan to introduce an amendment to agency rules that would weaken chairman Korsmo's authority. Stay tuned...

Depending on what happens with the governor and the state legislature in Trenton, subprime lenders might soonbolt New Jersey. It all depends on pending legislation in the state, legislation that is intended to crack downon predatory lenders. "It could bring about a radical change," says attorney Wright Andrews. NewJersey is one of the largest production states in the nation...

Not since the heydays of Salomon Brothers and Lew Ranieri has Wall Street gone so ga-ga over themortgage business. But this time around the Street is focusing not just on securitization, but on production. Casein point: Morgan Stanley is about to make a big announcement on hiring an executive director of mortgagelending. The salary, we are told, is in the "upper six-figure" range. For more details see the Monday,Jan. 13 issue of National Mortgage News...