The Very Big Picture

THE VERY BIG PICTURE: We got us a new mortgage industry. Well sort of. It's hard to say without taking into account the future of Fannie Mae and Freddie Mac which probably won't be decided until the end of 2011. (Full coverage of the final language of the bill can be found on the National Mortgage News website at: http://www.nationalmortgagenews.com/) But before I get into the nitty-gritty, keep in mind that the final bill is 2,000 pages long and there's a lot to go over. The obvious winners will be lenders and securitizers of 'A' credit quality loans, especially those of the FHA variety. Loan brokers could be big losers because of the HVCC and yield spread premium language. As I write this salesmen and women who are members of the National Association of Mortgage Brokers are meeting in Phoenix for their annual convention and you can bet reg reform will be 'Topic A' throughout the convention. NAMB chiefs might have a lot to answer for, namely that brokers became a punching bag (along with Fannie Mae and Freddie Mac) for ignorant politicians who keep forgetting that if it weren't for Wall Street's key role in banking subprime lenders and securitizing their poorly underwritten loans (was there any underwriting?) this mess (and housing bubble) would not have happened. But you've heard that from me before. One thing the new bill does is slam the door on subprime lending and securitization. That game has been over for two years anyway, and isn't coming back. I would guess that if the subprime ever returns it will mirror what it was in the 1960s and 1970s: high equity loans, high rates with the paper held by finance companies that get their backing from private (rich) individuals, hedge funds or Wall Street. It's back to the future...

Technology consultant Jeff Lebowitz estimates that revenues at Desktop Underwriter and Loan Prospector average $200 million to $250 million a year. Both are AU products owned by Fannie and Freddie. "You could sell them for one- to two-times revenue more or less," he said. Of course, the money raised would be a drop in the bucket compared to the $140 billion Treasury has pumped into the two...

We understand that not only has Impac Mortgage Holdings signed on as a correspondent to PennyMac but it's moving closer to being a warehouse lender again. I'm told that all this is preliminary but things are moving forward in that regard...

I heard that former warehouse lending official Michael McAuley interviewed for the top warehouse job over at MetLife Home Loans. During his career McAuley has worked at Washington Mutual and other firms. He reportedly turned down the MetLife position...

Oh Canada! I love the way the TV media sees a print story and continually regurgitates its contents as though it were fact. Case in point was a recent Wall Street Journal article about how wonderful Canada's housing finance system is. This past week one CNBC anchor was telling viewers about the low delinquencies and strong home price gains in Canada -- all accomplished without using mortgage interest deductions for tax payers. (She did not source the WSJ but that's where it came from.) Canada, by the way, also has hefty downpayment requirements. I have a few things to say here: first off, it's Canada, a nation with just 30 million people, one-tenth the size of the U.S. It's cold. Most of the country hates baseball and feels indifferent to soccer. When Rusty Staub played for Expos he was a national hero. You know why? Answer: not because he was a good hitter but because he was a chef. Okay enough of my Canada rant. (Don't get me wrong, I like the place.) And perhaps, yes, we can learn some lessons from our neighbors up north. But be careful here, Maple Leaf fans. Some housing analysts think Canada might be looking at a mini-housing bubble too...

Barclays Capital on the unemployment numbers: "We expect nonfarm payrolls to decline by 100k in June (last: 431k, consensus: -110k, Friday), reflecting a 245k drop in census workers and a 145k increase in non-census hires. We look for a 0.1pp decline in the unemployment rate, to 9.6% (consensus: 9.8%), a 0.1% m/m rise (last: 0.3%, consensus: 0.1%) in average hourly earnings and unchanged hours worked of 34.2 (last: 34.2; consensus: 34.2)."

DATA STUFF: In case I forgot to tell readers, the 1Q edition of the Quarterly Data Report is now out. (It has been for several weeks.) 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: Deartra.Todd@SourceMedia.com...

OUR RESEARCH REVEALS: The top production gainer in 1Q was none other than Residential Capital Corp. Its fundings rose 28% according to the Quarterly Data Report.

DATA STUFF: The brand new edition of NMN's Annual Data Report is out too. In the ADR you can find rankings on the top 100 lenders and servicers in 2009 with complete breakdowns on production channels and subservicing and subprime servicing. To order the ADR drop a line to: Deartra.Todd@SourceMedia.com. In a month or so you can get the top 400 in our MortgageStats.com product.

SURVEY NOTICE No. 1: Our annual "Top Producer Survey" (a k a LO survey) is still available at http://brokeruniverse.com/losurvey. Please spend a few moments answering our questions. It will generate free publicity for your shop. We are giving away complimentary subscriptions to Origination News to those who provide their 2009 origination volume. Questions? Send an e-mail to Deartra.Todd@SourceMedia.com...

SURVEY NOTICE No. 2: It's survey time once again for sellers and servicers. Look for our annual survey in your computer mailbox or email: Deartra.Todd@SourceMedia.com.

I'm on Twitter. (http://twitter.com/PaulMuolo) On occasion I reveal stories that are just about to break on the NMN website.

DATA NOTICE: National Mortgage News has all different data sets available for purchase including rankings and contact lists on the nation's top lenders and servicers. Send your requests for information to Deartra.Todd@SourceMedia.com. Dee can also tell you about our Web-friendly MortgageStats.com product.

THE LAST WORD: "Last words, lost words...elevation don't go to my head" -- Tom Verlaine