What We're Hearing

A few weeks back, Freddie Mac ousted four more officials as part of its ongoing investigation into its earnings restatement scandal. To date, the four have not commented on their parting of ways with the mortgage giant, that is, until now. One of the four, former vice president of investments Byron Boston told National Mortgage News that the "real story" isn't about "those who got fired -- it's about the people who are still there." In a brief interview, Mr. Boston declined to elaborate, but he said he was not bitter about being let go, adding, "I'm moving on." He said he will likely return to the capital markets arena. Six years back he joined Freddie from Wall Street...

Born to run out of New Jersey: Many subprime lenders are ready to bolt the state of Bruce Springsteen and " The Sopranos " because of the New Jersey Home Ownership Security Act. The law, which goes into effect on Nov. 27, is intended to prevent predatory lending, but provisions actually hurt all nonconforming lenders. NovaStar Mortgage, for instance, has already declared that it will cease conducting business in New Jersey because rating agencies are refusing to assign ratings to structured finance transactions...

Can I get a Neil Young CD with that mortgage? Thomas Lee, who recently invested in fledgling nonconforming lender ResMAE, is negotiating (along with several high profile partners) to buy a stake in the music division of TimeWarner. Mr. Young records for Warner/Reprise...

Even though Washington Mutual earned $1 billion in the third quarter and beat its earnings estimate by a penny, Sandler O'Neill & Partners called it a "sloppy" quarter for the nation's largest residential servicer. Sandler believes the S&L/mortgage banker "will aggressively trim staff as volume declines." On Thursday, WaMu said it will cut 177 jobs in Santa Rosa within two months because of a sharp decline in loan demand. According to the Santa Rosa Press Democrat, the cuts represent almost half of the company's mortgage-related jobs in Sonoma County. Officials said further reductions are possible in coming months...

Rep. Christopher Shays , R-Conn., is calling for a congressional investigation of Fannie Mae and Freddie Mac's lobbying activities and their "chutzpah to dictate" to Congress and the White House how they will be regulated. No word yet on whether the congressman first received permission from comedian Jackie Mason to use the word "chutzpah"...

WASHINGTON NEWS: The White House is, in no way, backing down on its belief that Fannie and Freddie need a strong independent regulator. This past week Gregory Mankiw, chairman of the Council of Economic Advisers, told a group of state bank supervisors that "the appearance of greater oversight without the reality would be a step in the wrong direction." This coming Thursday, Nov. 13, the Senate Banking Committee will hold its third hearing on proposals to improve regulation of housing government-sponsored enterprises, including the Federal Home Loan Bank System. A witness list should be ready early next week. It's anticipated that officials from the General Accounting Office and Securities and Exchange Commission will testify.

MORTGAGE PEOPLE: Scott McAfee, chief executive of WMC Mortgage , one of the nation's largest subprime lenders, has left the company. He could not be reached for comment. His replacement is Daniel Porter, former CEO of Wells Fargo Financial. Susan Estes , former U.S. head of fixed-income trading at Deutsche Banc Securities , has been hired by Countrywide to head the firm's Treasury and agency debt trading department. At Deutsche Banc, Ms. Estes was head of fixed income in North America. Radian Guaranty has named Richard Reindl as senior account executive in charge of developing and maintaining client relationships in northern Illinois.

WATCH ON THE 10-YEAR: As we went to press, the yield on the 10-year Treasury was at 4.45%, compared to 4.34% a week ago.