THE BIG PICTURE: In the eyes of most of the business community President Obama can do no right. At least that's the way I view it. Perhaps I should stop talking to mortgage professionals and watching CNBC. The new unemployment numbers came out Friday and depending on which spinmeister you speak to, it was better than expected or a disappointment. Yes, the U.S. economy continues to struggle. It's no secret that the White House is planning some type of 'October Surprise' to aid the business community, and from what we're told there's a mortgage/housing component to the plan. But what? One idea that we heard about – eventually shot down by Treasury – had the administration (which controls Fannie Mae and Freddie Mac) automatically reducing the interest rate on all outstanding GSE loans to a market rate of say 4%. This idea sounds quite interesting – but crazy. For starters, investors in Fannie/Freddie MBS would have a fit. Think about this: suddenly a 6% MBS is paying 4%? Can you imagine? Where's the Association of Mortgage Investors when you need them? Meanwhile, Republicans want to extend the Bush tax cuts for all Americans while the White House is leaning toward a plan that does so, but only for those earning less than $250k. Yes, the next 60 days are going to be interesting. And indeed the way things look right now, the GOP will gain control of the House and maybe the Senate. But once in power what will the GOP do to aid the economy? The party will have to come up a plan besides 'just say no to Obama.' The situation reminds me a bit of the last days of the George H. W. Bush presidency. He and his advisors kept insisting the economy was getting better but the electorate didn't believe him and delivered Bill Clinton to the White House (thanks to Ross Perot). This time around, the economy might be getting better (who knows, really?) but even if it is, the GOP will gain power. Anyway, if you have any insight into what the White House/Treasury/HUD might do to aid the mortgage market drop me a line at:
What are the 10 most important things you need to know about the mortgage market right now? It's all in the new version of MortgageStats.com, an online data product that ranks the nation's top 500 lenders and 400 servicers with breakdowns on production channels, delinquencies (where available) and more, including CEO names and contact information. To order MortgageStats.com drop an email to:
This past week National Mortgage News broke the news that warehouse lending executive David Frase had parted ways with Southwest Securities. In Monday's NMN we will be publishing a roundup on the warehouse business, exploring what SWS, Sovereign and MetLife are up to. To subscribe to NMN call: (800)221-1809…
So, who has been buying some of Residential Capital Corp.'s troubled whole loans? ResCap, on occasion, has given out sale figures, but usually will not indentify the names of buyers. But on CNBC late Friday Steven Romick, a partner in First Pacific Advisors, said his firm has been buying ResCap whole loans for its FPA Crescent Fund. The fund has been buying problem whole loans from other commercial banks too…
WASHINGTON NEWS: As a fallback position, the National Association of Home Builders is willing to accept limits on incentives builders can offer buyers that use their mortgage and title companies -- but only to keep HUD from taking more restrictive actions. A few months ago, HUD started a Real Estate Settlement Procedures Act rulemaking process by raising concerns that homebuyers may be paying higher mortgage rates and closing costs when they use a builder's mortgage company. In a comment letter, NAHB argues that these affiliated firms actually expedite sales and provide substantial savings for the consumers. (Reporting by NMN's Brian Collins.)
MORTGAGE PEOPLE: Atlantic Coast Federal Corp. in Waycross, Ga., has appointed veteran banker Jay Sidhu as executive chairman of its thrift.
THE 'HE'S BACK' GAZETTE: In case you missed it, Neil Kornswiet is running the residential mortgage division of a Southern California bank. Neil cut his teeth in mortgage subprimeland. You can bet that his new employer will not be making any subprime loans whatsoever. And if it does, that will be a story indeed.
CLARIFCATION: PennyMac, the publicly traded REIT, wants you to know that it is more than just a vulture fund, more than just a crow picking on the carcass of troubled mortgages. The company is actually what it calls a "group of specialty financial services firms." Not only is it a REIT, but its family of companies include private opportunity funds. Plus, it has a conduit and a servicing division. Got that? Actually, I don't see why they should be embarrassed by the vulture fund moniker. I know quite a few mortgage vulture fund managers who are quite proud of what they do. Then again, perhaps PennyMac is looking ahead to the days of when mortgage banking is once again a thriving business?
DATA ANNOUNCEMENT: The new 2Q edition of the Quarterly Data Report will be out later this week. The QDR provides industry-wide composite data on loan production and servicing and specific figures on the top 100, including delinquencies. 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 email to:
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THE LAST WORD: If you need a good laugh, check out Jim Gaffigan's comedy CD 'King Baby.' His riffs on camping and being lazy are worth checking out. Have a good holiday weekend.
