Subprime production volumes are booming, at least that's what the new Quarterly Data Report says. In the first half, $106 billion in subprime loans were written which means that if extrapolated out, subprime producers will fund a record $200-plus billion this year. Firms like Encore Credit, First Franklin, New Century, Option One and Washington Mutual's subprime division are experiencing double-digit gains. But let's take a look at the B&C volume leaders of five years ago, right before the industry crashed and burned. Among the top 10 of midyear 1997, just three firms still exist: Associates (which is owned by Citigroup now), Green Tree (which is owned by Conseco now and is called Conseco Finance) and Commercial Credit (which is now owned by Citigroup.) Conseco's future is shaky because its parent may file for bankruptcy protection. Commercial Credit and Associates operate as " CitiFinancial," which means there are really only two of the top 10 left from yesteryear...
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Five years ago Household Finance (today's number one ranked subprime lender) ranked 12th overall, but that was before it bought Beneficial Finance of New Jersey. It will be interesting to see how Household does after Washington state regulators are done with it. Several of today's other leading subprime firms likely are salivating at the opportunity to take business away from Household should regulators make life for the company more difficult...
Meanwhile, Household chief William Aldinger said at a Merrill Lynch conference that losses on subprime loans will continue to increase as the year goes on...
The 10-year Treasury once again fell below 4% this past week as the stock market took yet another dip. As long as bonds stay strong and equities weak you can expect refis to continue apace...
Freddie Mac has named Connie Ferran vice president, Western states, for its community lending division. Connie has been with the company since 1991...
John Wiley & Sons has just published "How to Save Thousands of Dollars on Your Mortgage." The book was penned by Randy Johnson (not the Arizona pitcher), a loan broker of 20 years. One of the chapters is entitled "How Lenders Can Cheat Their Customers." One review of the book says, "Only serious borrowers will study this book. Its format is dull..."
IN CASE YOU MISSED IT: According to a new study done by America's Community Bankers, commercial bank CEOs earn more than their thrift counterparts: $199,389 to $169,787.
AND FINALLY: Fannie Mae won't be reviving its dormant political action committee after all. (See the Monday edition of National Mortgage News.)
