Mark Tuesday May 6, 2003 on your calendars. It may very well be called "MortgageDay" -- the day it became apparent (thanks to Alan Greenspan and the Federal Reserve) that the go-go origination market of the past 24 months could go on for, well, maybe another 24months. The key to falling bond yields last week was a Fed statement that declared: "The probability of anunwelcome substantial fall in inflation, though minor, exceeds that of a pickup in inflation from its already lowlevel." Translated into English: The Fed is scared silly that deflation could hammer an already weak economy,which means it may cut rates again. Will homebuyers see a 4% conventional FRM one of these days? If so, look forservicing runoff to escalate and tons of portfolio turnover for portfolio lenders, as well as Fannie Mae and FreddieMac. However, there is one wildcard, which could send rates upward, namelythe federal deficit. If the dollar keeps sinking against the euro, and the Bushadministration and Congress can't get their act together on government spending, the U.S. may have to increase theyield on new Treasuries...
Is a big restructuring coming at subprime giant HouseholdInternational? A company spokesman said he has heard nothing about a reorg,but Household just dismissed its national sales director, Rudy Orman, an eight-year veteran of the firm. (See the Monday edition of National Mortgage News for the exclusive)...
Media titan Barry Diller is paying $734 million for the LendingTree, an Internet matchmaking platform that has no production and no receivables. The dealseems exceedingly rich according to some investment bankers, but what does it really say about the mortgage business?Answer: In the primary market, lenders (1) either stink at marketing to the consumers or (2) they think advertisingon TV, radio, print isn't cost-effective. In other words, LendingTree has built a better consumer marketing mousetrap.LendingTree is now profitable. So the question begs: how come no one has copied LendingTree's concept and run withit?
General Electric, which failed miserablyat running a mortgage banking operation, plans to enter the market for unsecured consumer loans. For now, it planson staying away from single-family real estate-secured debt. Keep in mind that six, seven years ago, GE lookedat buying a subprime lender, but didn't like what it saw. GE dodged a bullet several times over by not buying firmslike United Companies...
Countrywide Financial Corp. will hostan investor forum at its Calabasas headquarters on May 27. It will conduct a tour of its servicing operations thenext day...
In April, subprime lender New CenturyFinancial funded $1.91 billion in loans, a 75% increase from the sameperiod a year earlier. Its stock has been on a tear of late and now trades for than $40 a share...
WASHINGTON NEWS: Federal Home Loan Bank of Atlanta president Ray Christman thinks that some day -- he isn'tsaying when exactly -- the FHLBs should be allowed to securitize mortgages and compete (more directly) againstFannie Mae and Freddie Mac. And in related news, the Congressional Black Caucushas questioned -- questioned the FHFB,that is -- about the expansionist nature of the MPP and MPF programs. Now, let's see, who could've persuaded theseelected officials to do that?
PEOPLE: JamesM. Goryeb has resigned as president of ChampionMortgage, one of the granddaddies of subprime lending. Champion is anaffiliate of KeyCorp. His resignationis effective immediately. Washington Mutualhas hired Susan Jackson as itssenior vice president of emerging markets. She will serve the home loans and insurance services group. UniMortgage has named H. Curtis Jordan president and chief operating officer.Mr. Jordan joined the Florida company in October as executive vice president.
IN CASE YOU MISSED IT: Richmond, Va.-basedLandAmerica Financial Group hassigned an agreement to purchase Orange County Bancorp and its wholly owned subsidiary, Centennial Bank, in Fountain Valley, Calif., subject to regulatory approval. The transaction is anticipatedto close in the fourth quarter 2003.
ALL MORTGAGE BANKERS TAKE NOTE ONE MORE TIME:National Mortgage News is wrappingup its full-year 2002 lending/servicing survey. Mortgage funders of all sizes are invited to participate. The informationwill appear in the Mortgage Industry Directory which is the "Who's Who" of mortgage banking.If you need a survey e-mail:
