It looks as though more turmoil is ahead for the nation's top subprime subservicer, Fairbanks Capital Corp.On Monday June 9, National Mortgage News reports on the firing of Fairbanks' president Bill Garland.Mr. Garland could not be reached for comment. Bill, by the way, used to work for Advanta Mortgage, whichwas sold a few years back to Chase. One source with close ties to Fairbanks notes that the company likelydoes not have the option of selling any of its subservicing contracts. "Would you buy those contracts knowingthat a class-action suit could be imbedded in the portfolio?" he said. Fairbanks is under investigation bythe Federal Trade Commission and the Department of Housing and Urban Development. One fear for thecompany is that any successful class-action claims could result in the company paying out millions of dollars."Think about the people who lost homes because of them. This could be a real black hole." Fairbanks issaying very little about its problems these days. It didn't announce Mr. Garland's departure and only confirmedit after an NMN reporter called the company...
What a coincidence: On Monday May 26, NMN published its first-quarter production rankings along withits estimate on first-quarter loan production. NMN extrapolated out first-quarter production and estimatedthat at the current run rate, originations could total $3.65 trillion this year. A week later, on Monday June 2,Fannie Mae raised its projection for 2003 mortgage originations to a $3.7 trillion...
How hot is the mortgage market right now? Indiana lender Kathy Grider reports that rates are so low that"if people can fog a mirror" loan officers are finding "a program to fit it to get people into homes."She adds, "My living room looks like a SIB branch right now"...
In the first quarter of 2003, 7% of Freddie Mac's $173 billion in purchases were for investor propertieswhere the owner hopes to make money on the rent...
Charles Schwab Corp. has cut its stake in online lender E-Loan to 2.3% from 11.8%. Schwab owned1.39 million E-Loan shares as of April 25, the filing said. Previously, it reported owning 7.89 million shares...
Two more subprime firms to keep an eye on: Novastar recently hit a 52-week high of $60. Its low is $18.Also, Aames Financial posted first-quarter earnings of $6.7 million. Aames, like Delta Financial,has managed to comeback from (to put it kindly) tough times...
WASHINGTON NEWS: The Supreme Court ruled that lawsuits claiming national banks are charging illegallyhigh interest rates must be tried in Federal Courts, not State Courts. Banks apparently liked being sued in FederalCourt, because judges and juries have less tolerance for consumer complaints. The mortgage insurance industry isstill hopeful that it can get language passed that would allow consumers to deduct mortgage insurance paymentsfrom their income taxes. Such language was booted from the recently passed tax-cut bill, but could see life elsewhere,or so we are told. FM Policy Focus's favorite agency, The Office of Federal Housing Enterprise Oversightrecently celebrated its 10th anniversary. Sens. Debbie Stabenow (D-Mich.) and Gordon Smith (R-Ore.)have introduced the "Homeownership Tax Credit Act." The bill authorizes a one-time tax credit to first-time,qualified homebuyers in the 27% tax bracket or lower.
FORUMS: On Monday June 9, the American Enterprise Institute will hold a forum entitled, "AreFannie Mae and Freddie Mac Meeting Their Obligations to Promote Minority and Low-Income Home Ownership?" Thediscussion will take place at AEI headquarters in Washington. "Discussants" include Peter Zornfrom Freddie Mac and Richard A. Williams from Notre Dame University. The moderator, as always withGSE issues, is Peter Wallison, an AEI resident.
ALL MORTGAGE BANKERS TAKE NOTE: The door is now closed on NMN's annual survey of mortgage bankersand brokers. If you missed the deadline and still want to get your survey in you'll have to e-mail Deartra Toddand beg her. (
