Is Fannie Mae ready to take over the subprime market? Not exactly but a recent research note by Morgan Stanley analyst Ken Posner points out that the secondary giant has shown "signs of success" in the niche. In the report Posner says Fannie purchased $9.5 billion in "expanded alternatives" in 2001. In case you're wondering "expanded alternatives" is Fannie's "nice" word for subprime lending. Morgan estimates that the subprime niche is $400 billion in size. (The Quarterly Data Report estimates the subprime market to be between $150 billion to $200 billion a year in terms of production, and $350 billion in terms of receivables.) In the research note Posner says that Fannie spent much of last year "training and certifying lenders in the intricacies of subprime marketing, underwriting, and processing." He adds: "In some regions of the country Fannie Mae has now achieved 80% penetration among its lenders for subprime products; this was not the case for 2001." The analyst made his comments after spending a day with Fannie's senior managers...
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The overall stock market took in on the chin this past week with the NASDAQ, once again, getting creamed. It should be pointed out that not too long along Fannie Mae was considering changing its name to FannieMae.com, while Countrywide was considering a change to Countrywide.com. Countrywide also was considering issuing a tracking stock for its online production unit. In retrospect the decision to not change a thing was a good one...
The entire thrift industry earned $3 billion in the first quarter of 2001. Washington Mutual, the nation's largest thrift (and largest mortgage banker) alone earned $950 million. Stated differently, WaMu accounted for 31.6% of the thrift industry's earnings. Once it completes its purchase of CalFed you can add a few more points to that percentage...
Then again, in a recent issue of U.S. Banker magazine, veteran banking editor/reporter Robert Bennett writes that, "The best performers among the nation's banks and thrifts in 2001 tended to be the smaller banks among the 100 largest"...
Is mortgage banking a spring board to the, er, arts? Consider this: Former MBS guru Lewis S. Ranieri, chairman/owner of Bank United (since sold to WaMu) is in line to be the next chairman of the American Ballet Theater. Former Fannie Mae chairman Jim Johnson is chairman of the Kennedy Center, and former Fannie Mae president Larry Small is the head of the Smithsonian. (As chairman of ABT Mr. Ranieri will not be dancing)...
Early this past week the stock of Flagstar Bancorp, Troy, Mich., split three-for-two. The company is the 12 th largest mortgage banker in the U.S. according to National Mortgage News. In late May Flagstar filed a registration statement with the SEC to sell 1.5 million shares of common stock owned by chairman Thomas Hammond and members of his immediate family...
IN CASE YOU MISSED IT: Freddie Mac's servicing portfolio recently broke the 10 million loan mark...
