As the sun went down on Friday afternoon journalists that cover the mortgage industry (okay, maybe just me)were praying that either Lewis Ranieri or Angelo Mozilo would get the nod to become the next CEOof Freddie Mac. Both men are outspoken, blunt, and have intellects that would make it a sinful pleasureto cover the secondary giant. (Actually, Freddie Mac was already an interesting beat but the restatement scandalmade it even better.) Just picture some of the Congressional testimony that might come about when either gentlemanis asked a touchy question. In other words, there's no way in hell that either one of these industry veterans willget the job. By the way, Mr. Mozilo, chairman of Countrywide, told us he is "not available." Mr.Ranieri, one of the inventors of the MBS, was immortalized in the book "Liar's Poker," and is best knownfor his days at Salomon Brothers and for taking a failed Texas thrift, Bank United, growing it intoa regional powerhouse and then selling it to Washington Mutual for a ton of money. For details on the "WhoWill Replace Parseghian" story see the Monday September 1 edition of National Mortgage News...
Smith Barney says that once Freddie Mac finally restates earnings (the adjustment could be as high as$4.5 billion, upwards, that is) the mortgage giant will have a new estimated book value of $31 to $36 a share.Late last week the stock was trading at about $50 a share. Historically, Freddie has had a price to book ratioof about 2.8 times. One GSE critic told us recently that he would love to buy the shares at current levels butadmitted that his supervisors would not approve...
Washington Mutual, the nation's second largest mortgage banker, said it opened a record-setting 49 retail bankingde novo stores in August. The majority of the new banking stores, 32, opened in Chicago last week. This is thelargest number of retail banking stores WaMu has opened in one month, and the largest number opened in a day....
Despite the expectation that interest rates will rise modestly, and that real estate fundamentals will improveonly slightly by year-end, issuance of U.S. CMBS should reach approximately $70 billion in 2003, according to creditanalyst Kim Diamond, a managing director in Standard & Poor's structured finance ratings groupin New York. "We expect interest rates to either remain stable or increase slightly," said Ms. Diamond."But any change would not be significant enough to put a major damper on origination volume. Rates will stillbe historically low." CMBS issuance in 2002 was roughly $60 billion...
Realtor RE/MAX said it has selected Bank of America as its "exclusive preferred lender andhome equity provider" for its home buying customers. BoA is both a retail and wholesale lender. RE/MAX boasts83,000 member sales associates...
Don't go east, young man: China's banking regulator is going to raise to 25% from 15% the limit on foreign ownershipin that country's banks. Banks of course fund mortgages...
LandAmerica recently bought Ten Mile Title of Colorado, a move that will expand its presence inthe state. In March the company purchased Weld County Title in Greeley...
Ameriquest Mortgage is still advertising (to consumers) on Netscape that mortgage rates have hit"historic" lows. Maybe subprime lenders haven't changed their rates within the past eight weeks but primelenders certainly have...
Responding to a recent column about how smart mortgage bankers watch the yield on 10-year Treasury like a hawk,Windsor Capital Mortgage branch manager Michael Zau wrote to us that "most smart mortgage bankers"he knows are watching "either the FNMA 5.5% coupon or 6% coupon... but you and I must know that mortgage brokerpricing comes from the mortgage bonds and not the treasuries.. right?" Point well taken...
Greenwich Capital is feeling bullish on the overall economy: "Employment is in the process of bottomingout, which is also consistent with that fact that economic activity appears to have accelerated substantially inQ3," writes the company in a recent report. Strong employment should boost the purchase money market whichis expected to be the only game in town once refis subside...
FOCUS ON A REGIONAL LENDER: In a recent filing with the SEC, Hudson City Bancorp of New Jerseynotes: "During the first six months of 2003, due to the low long-term interest rate environment, $255.7 millionof our loan originations were the result of refinancing of our existing mortgage loans. The amount of refinancingof existing mortgage loans was included in total loan originations. We allow certain customers to modify, for afee, their existing mortgage loans with the intent of maintaining customer relationships in periods of extensiverefinancing due to low long-term interest rates. In general, all terms and conditions of the existing mortgageloan remain the same except the adjustment of the interest rate to the currently offered fixed-rate product witha similar term to maturity or to a reduced term at the request of the borrower. Modifications of our existing mortgageloans during the first six months of 2003 were approximately $878.8 million."
10-YEAR TREASURY WATCH: On close of business Tuesday the 10-year Treasury was yielding 4.486%. On Fridayits yield was 4.466%. It seems as though the 10-year is stabilizing. Also: The Congressional Budget Officepredicted that the federal deficit would rise to $480 billion in fiscal 2004, indicating that the budget outlookdeteriorated substantially since it issued projections in March. Maybe the U.S. Treasury market will once againeclipse residential debt as the largest debt market in the world...
MORTGAGE PEOPLE: Bill Black, a former regulator who made a name for himself during the S&Lcrisis, has been chosen by the University of Texas to establish a special studies program on white collarcrime. Black, who in the late 1980s served as director of litigation for the Federal Home Loan Bank Board,was picked by the college to be interim executive director of its newly created "Institute of Fraud Studies."Washington Mutual has named Barbara Smith vice president/community development officer for its communityand external affairs group. The Mortgage Bankers Association has named Francis Creighton as its directorof government affairs. He will be primarily responsible for lobbying the Congress on key mortgage issues. Creightonjoins MBA from the office of Rep. Steve Israel, Democrat of New York.
MORTGAGE DATA: National Mortgage News has just released the second quarter edition of its QuarterlyData Report which includes 50 tables, including rankings on the top prime and subprime lenders and servicers.Also available: a new "Card-QDR" which ranks the top players in the card industry. For information onthe mortgage QDR email:
