THIS JUST IN: Paul Best, head of warehouse lending at National City/PNC, is leaving the bank for another job. PNC, of course, had pulled the plug on the business with its last lines drying up a few weeks ago. (Best, who declined to comment, is under contract for a few more months.) Meanwhile, we understand that a handful of warehouse firms are staffing up. With PNC out of the market, and the SWS Group letting its business drift away, nonbanks are scrambling for new lines. More details are in the Monday paper edition of National Mortgage News. Don't subscribe? Call: 800-221-1809…
Foreclosure-gate is continuing to have a direct impact on certain nonperforming loan auctions, we're told. Sellers are getting anxious and have greatly reduced their price expectations. "We've been seeing a lot of packages lately," said one West Coast-based bidder. "And we're starting to win bids. A few months ago there were 15 to 20 bidders on a package. Now we're seeing two our three in some cases." Meanwhile, PennyMac is scheduled to release earnings next Wednesday, Nov. 3, before the market opens. Will it be a good day for Stan Kurland?...
Fannie Mae continues to dispose of its REO dregs via bulk sales. The past two months the GSE sold about 1,000 units via the bulk route, said one advisor close to the company. Next Friday Fannie will report third-quarter earnings, or perhaps "results" is a better word. “Earnings” indicates that a company actually made a profit and Fannie hasn't seen one of those in a while. Of course, it's hard to actually earn money when you have to pay dividend "protection" to the U.S. Treasury every quarter…
THE MAIN EVENT: POLITICS: Tuesday's the big day. It's supposed to be a game-changer with Republicans increasing their power (or so we've been told constantly for a year or more). You don't read this column for my political commentary, but rest assured the GSEs will be the number one economic/political issue come early next year when the White House releases its blueprint for Fannie/Freddie and the future of the nation's housing finance system. Will our newly elected leaders quickly become educated as to how important the two are to our nation's housing recovery or will it be a scene right out of "Frankenstein" where the villagers, armed with pitchforks, hunt down the monster and burn this misunderstood creature to the ground? As I've noted in previous columns, if you kill the GSEs you can kiss the 30-year fixed-rate loan goodbye. And maybe our new leaders will put a bullet in the head of the mortgage interest deduction, too. (We tackle this topic in Monday's NMN.) So, early next year we may see several bills to kill the GSEs, and eliminate the tax deduction for mortgage interest payments. And if that happens, we all will be selling apples on the corner. Then again, I'm sure the private sector will step in to hire us. After all, U.S. firms have been sitting on $1 trillion in cash and it's just a matter of time before they spend it. Now let us pray…
My only regret about this year's race: that Sen. Chuck Schumer isn't running, and that I'm not a resident of New York State, though I was born there…
BOOK CORNER: Special thanks to BuckleySandler LLP, which invited me to talk before the (growing) law firm and its partners about my book “Chain of Blame, How Wall Street Caused the Mortgage and Credit Crisis.” Some day “Chain” will be made into a major motion picture. (And some day the New York Mets will win the World Series again.) In other book news, reporter Mike Hudson has just released a book on the crisis. (Good luck, Mike.) I understand a Seattle reporter just inked a deal to write about Washington Mutual and in a few months a book will be released on the downfall of Countrywide and Angelo Mozilo. Also, a former employee of WaMu (who shall remain nameless) is working on an insider's account. I read a few chapters. It's got potential.
SCARY STUFF: Noted economist Nouriel Roubini wrote this week that the U.S. economy is a "fiscal train wreck" waiting to happen. He says America faces minimal growth, high unemployment and deflationary pressure. He said the U.S. remains on an "unsustainable fiscal course" and the likely make-up of Congress after elections next Tuesday, in which the Republicans look set for strong gains, virtually takes fiscal reform off the agenda. "The risk...is that something on the fiscal side will snap. The trigger could be a debt rollover crisis in a major U.S. state government," he wrote. Luckily, California is on the mend. (Yeah, right.) In other words, the only way out of this mess is that Jesus returns, or an asteroid wipes out the planet and it's all over in an instant. Happy Halloween!
MORTGAGE PEOPLE: Mortgage vendor Lender Processing Services, Jacksonville, Fla., named Tom Schilling its executive vice president and chief financial officer.
WASHINGTON NEWS: Fannie Mae, which has temporarily suspended certain REO sales because of the foreclosure-gate scandal, plans to hold its servicers responsible for increased carrying costs on these properties, industry sources told National Mortgage News. The full story is on the NMN website at
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 a few weeks. As noted, our research staff is 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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THE LAST WORD: "If there is hope it lies in the proles" — Winston, from George Orwell's book, “1984.” Or maybe Ayn Rand is right.
