More than two years ago National Mortgage News first reported that Fannie Mae had grub-staked Homestore.com, a consumer dot-com that offers real estate info to, well, consumers. When NMN reported the story, all the mortgage world yawned. Fannie's original investment in the firm's preferred stock was about $10 million. This past week the Wall Street Journal reported that in July of last year Fannie gave 1.75 million of its 2 million Homestore.com (now known as Homestore Inc.) shares to its Fannie Mae Foundation, a charity. The foundation smartly sold the shares right away at about $35 a pop, netting about $61 million. Today, Homestore's shares trade for bout 50 cents each and its future looks less than bright. GE Capital Corp. also grub-staked Homestore.com, and like Fannie's foundation, dumped its shares at a nice profit, at least that's what one GE source told us not too long ago. The WSJ article, which was less than charitable to the charity, repeated a common gripe that the foundation's TV and print ads are really a way for Fannie Mae to build brand name recognition with consumers. Why would Fannie want to do this? To pave the way for its eventual foray into the market as a funder. Currently, Fannie's charter prohibits this, but one mortgage banker, based on the West Coast, said he believes that Fannie's first step into the origination business will be as a table funder, a wholesaler. He theorizes that if Fannie decides to go this route that it will have to either change or toss its charter...
Processing Content
Subprime giant Household International said it is restating its earnings by $386 million over eight years due to accounting concerns on the way it books credit card revenue. The info was contained in an SEC filing. In the same filing, buried, was a nice little nugget about its subprime business -- that it contributed $1.2 billion in capital to its depositories in the first quarter to meet new capital adequacy guidelines promulgated by federal banking regulators. See NMN's Monday issue for full details...
In its second-quarter earnings statement, New Century, a noted subprime lender, said it produced $1.7 billion in 'A+' loans in the period. Does this mean that New Century is now a conventional lender? The company says no, that the loans are really subprime but are what it calls "higher quality" subprime...
The new 2Q edition of the Quarterly Data Report is out and subprime wholesalers with nice gains in the quarter include Ameriquest, New Century, Novastar and WMC...
Cendant Corp. is buying New England realty giant DeWolfe Companies. Cendant, as you may know, also owns Realtor Coldwell Banker as well as Cendant Mortgage. I assume that owning a Realtor is a great way to source loans to your mortgage firm, as long as you keep RESPA in mind...
Remember Life Savings of Riverside, Calif., the firm that put the "NINA" (no-income, no-asset verification) loan on the map? Life, which no longer produces NINA loans, is now a shadow of its former self. It is down to three branches and is changing its name to Pacific Premier Bancorp and is moving its HQ to Costa Mesa. It is still a thrift, but recently launched an income property lending group. It posted earnings of $253,000 in the second quarter, and appears to be living off the cash flow on some of its old mortgage residuals...
IN CASE YOU MISSED: The National Association of Realtors released its second-quarter home sale stats this past week. One of the hottest housing markets in the U.S is in Nassau & Suffolk counties on Long Island.
AND FINALLY: Servicing broker Ted Jadlos, ex of Phoenix Capital, is up and running again with a new firm, Griffin Capital. Ted and Griffin are both based in Denver.
