ANGELO'S ASHES: On Friday, Bank of America's stock slid by 7%. It was also the very same day that former Countrywide Financial Corp. chief Angelo Mozilo inked a deal with the Securities and Exchange Commission, settling the massive insider trading case against him and his lieutenants, David Sambol and Eric Sieracki. B of A, of course, bailed Countrywide out more than two years ago, just as the firm bordered on near collapse. And what did B of A get for its $4 billion investment? Answer: Big trouble in the form of legacy loans—and “foreclosure-gate.” If the Charlotte banking giant had not stepped in, Countrywide would've failed. That's a given. Here are a few more takeaways about the settlement and Countrywide: (1) Mozilo was a loved and feared competitor to many mortgage bankers. He went from being one of the most admired men in the industry to being a pariah. But if not for the housing bubble (a bubble that he must have seen coming) he would've gone down as one of the greatest innovators in the business. But that's all over, blown away. (2) Mozilo is coughing up $67 million to the SEC to make the charges go away—and without admitting any wrongdoing. For that, he gets rid of a massive headache and gets to keep $200 million in profits he made from selling his Countrywide shares. CNBC's Jim Cramer called it a great deal for Mozilo. Cramer is right. (3) Some people in the industry—including Mozilo himself, I'm told—question B of A's commitment to mortgages. Recently, the bank tossed its wholesale division overboard, a division that Mozilo created and grew over a 25-year period. With the foreclosure-gate crisis continuing to spread like wild fire, will the nation's megabanks reconsider their commitment to the mortgage business over the next few years? Will REITs and nonbanks move into the space and fill the void? Stay tuned…
THIS JUST IN: According to recent calculations done by National Mortgage News, the nation's three largest servicers—B of A, Wells Fargo and JPMorgan Chase—all value their servicing portfolios at 90 basis points or less. Basel III treats MSRs unfavorably, capping how much of this volatile asset can be counted toward capital. And with the future of Fannie and Freddie in doubt, is it any wonder that bulk servicing deals are few and far between unless the government is involved?...
By the way, I'm told there's a group of servicers called “Fannie's Fabulous Five.” These companies are specialty servicers to the GSE and are given portfolios to service when the current servicer fails to live up to Fannie's standards. If you have more info about the “Fab 5” drop me a line at
FNC Corp. of Oxford, Miss., said it is seeing an increasing number of nonperforming loan investors using its national collateral database product and related offerings. The database includes value information on millions of homes, using actual appraisal reports and county recorder information…
New foreclosure numbers were released by Lender Processing Services. The analytics firm said there are more than 7 million residential loans that are 30 days or more late…
MetLife Bank says its foreclosure affidavits are accurate. This comes after Moody's said it is reviewing MetLife Home Loans along with Litton Loan Servicing and Bayview Loan Servicing for a possible downgrade due to questionable foreclosure practices…
As for foreclosure-gate, if you need a list of the nation's top 100 servicers along with their late payments order the Quarterly Data Report. Just drop a line to
Until two weeks ago, the Rural Housing Service was guaranteeing rural home mortgages again. RHS administrator Tammye Trevino notified lenders the agency had run out of funding to guarantee additional single-family loans…
WASHINGTON NEWS: A replacement for the Home Valuation Code of Conduct rule is coming soon courtesy of the Federal Reserve Board. Will loan brokers catch a break and be allowed back into the appraisal process? Don't hold your breath, but one never knows. The Fed is also working on new rules that will ensure bank LOs do not exert undue influence on the appraisal process. Brian Collins of NMN will be covering this story more next week.
MORTGAGE PEOPLE: Freddie Mac named Clayton Rose to its board. Clayton is a professor of management practice at Harvard Business School.
MUST ATTEND MEETINGS AND CONFERENCE: If you have a vested interest in foreclosures you will want to attend SourceMedia's Best Practices in Short Sales and REO conference on Nov. 9 and 10 in San Diego. For more info visit this link
DATA ANNOUNCEMENT: The new 3Q edition of the Quarterly Data Report will be out in about seven weeks. We're busy sending out surveys to lender/servicers. Keep in mind that the 1Q and 2Q editions of the QDR are still available. The QDR provides industrywide composite data on loan production and servicing and specific figures on the top 100, including wholesale. A new feature for the QDR is our ranking of the nation's top FHA lenders. If you're looking for jumbo production numbers try the Alternative Products Quarterly Data Report. For more info on both drop an e-mail to
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