Fannie Mae caused a bit of a stir late last week when it confirmed that it had made a $70 million "floor"bid on the servicing platform of Conseco Finance, the largest player in the manufactured housing space.(Conseco's parent is in bankruptcy.) A Fannie spokeswoman quickly shot down speculation that the congressionallychartered mortgage giant wants to become a servicer. And of course, readers of National Mortgage Newsare aware that a few years back Fannie was talking to Alltel about buying its mortgage servicing operation.But hey, Fannie doesn't want anything to do with servicing, right? Yes, that's right. That's what the company said.Got that? Perhaps, Fannie fears that a new servicer could jack up the servicing fee on the underlying loans/ABS?(Roughly, 70% of Fannie's $10 billion in MH ABS is serviced by Conseco.) Perhaps, Fannie is concerned that Conseco'sservicing will fall apart in the hands of a new owner. One mortgage banker told us that if Fannie is so concernedabout the quality of the servicing, "I can recommend 10 good subservicers including HomEq, Wilshire,and a few others."...
MBS traders take note and then send a big thank you note to FM Watch. FM Watch has been pushing for greaterMBS disclosures by Fannie and Freddie. Well guess what? Now it's going to happen. But according to Sandler O'Neillanalyst Mike McMahon, additional MBS disclosures by the two GSEs will not make any difference at all inregard to GSE safety and soundness. Instead, greater disclosures could result in a narrowing in profit marginson MBS trades. Why? Because the more info that EVERYONE has, the tighter the bids. That might not prove to be asoothing thought to traders at J.P. Morgan & Co. Then again, J.P. is a charter member of FM Watch...
Do critics of Fannie & Freddie really want the Securities and Exchange Commission to have a role(even a small role) in regulating the two? Not only has the agency been asleep at the wheel during the corporatescandals of the past two years, but consider this: the SEC was given $25 million in supplemental funding in FY2002 to hire 125 additional positions including accountants, lawyers and compliance examiners. But according toone source, the SEC's website lists just one open position for accountant...
Sure, every mortgage firm is writing refis hand-over-fist, but a few are doing nice volumes in purchase moneyloans. According to the brand new (fourth-quarter) edition of the Quarterly Data Report, purchase moneyloans accounted for 89% of loans funded by Pulte Mortgage. And at Republic Bancorp in Michigan, 76%of its volume is purchase money...
In the fourth quarter, every single lender among the top 40 saw their loan volume increase compared to the samequarter a year ago -- except one: E*Trade of Menlo Park, Calif. Its volume sank by 16%. Maybe the tech busthad something to do with it...
MORTGAGE PEOPLE: This Tuesday Neill Fendly, government affairs committee chairman and past presidentof the National Association of Mortgage Brokers, will testify before the House Subcommittee on Housingand Community Opportunity. The panel is holding a hearing on HUD's proposed RESPA rule on reform of mortgagedisclosures.
IN CASE YOU MISSED IT: Last week The Wall Street Journal's editorial page took anotherswipe at Fannie and Freddie, wringing its hands over concerns about GSE debt, derivatives and disclosures. Andthat assistant mortgage broker who was one of two finalists in Fox's reality series "Joe Millionaire"was not picked by Mr. Fake Millionaire. Back to the salt mines for her...
