The Office of Federal Housing Enterprise Oversight thinks ousted Freddie Mac chief executive Leland Brendsel knows a bit about Wall Street's role in some of the questionable accounting maneuvers that are central to the company's $5 billion accounting scandal. But Mr. Brendsel -- who has never spoken publicly about the matter since being forced out in early June -- isn't talking. His stance has led to briefs and counterbriefs being filed in U.S. District Court in Alexandria, Va. In summary, OFHEO has subpoenaed his cooperation but he has fought back, questioning the agency's legal authority to do so. Unlike other federal banking agencies, OFHEO cannot file civil claims directly and instead must revert to the administrative law process. This hampers its ability to take tough action against alleged wrongdoers. But the OFHEO briefs filed in Virginia are interesting because it clearly shows that the agency is not done poking the coals of this scandal, in particular Wall Street's role in the alleged shenanigans. "Mr. Brendsel is needed to get a better understanding of the relationships that Freddie Mac had with the broker-dealers and how Freddie Mac worked with them to develop and execute the transactions," says OFHEO deputy general counsel David Roderer in one filing. OFHEO is investigating the role Morgan Stanley and other broker-dealers played. (As Deep Throat once told Bob Woodward: Follow the money.) Another question begs: will New York attorney general Elliot Spitzer eventually get involved? As long as he's mopping the floor with Wall Street, why not take a look at their role in the esoteric and virtually unregulated derivatives market? Mr. Spitzer reminds some of another (now former) crime fighter, Rudy Giuliani, who cleaned up Wall Street in the go-go 1980s. Mr. Giuliani successfully ran for public office. Spitzer is expected to take a run at governor...
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Mr. Brendsel is being represented by the law firm of Williams & Connelly, the same firm that defended President Clinton in the Monica Lewinksy scandal...
The stock of New York-based subprime lender Delta Financial has been rising like a star of late. In trading on Wednesday, Delta's stock rose almost 14%, ranking seventh among all price gainers on the AMEX that day. But then on Thursday, it was down 9% at one point. On Friday, it was up 4%. Delta has an interesting history. Started as a family-owned business, it went public last decade, flew high for a while and then crashed and burned. It was delisted by the NYSE, but came back to life a few years ago. Its CEO is still Hugh Miller...
Countrywide Financial Corp. last week booted its long-time independent auditor, Grant Thornton LLP , replacing it with KPMG LLP. Grant Thornton, by the way, has an interesting corporate history too. According to the book " Inside Job, the Looting of America's Savings & Loans," in the 1980s, it was known as Alexander Grant & Co. The accounting firm changed its name after a managing partner in Florida pleaded guilty to accepting $225,000 in bribes to falsify financial statements for ESM Government Securities , a mortgage-related company. ESM eventually went belly-up, amid criminal allegations. Alexander Grant also was the accountant for Centennial Savings of Guerneville, Calif., a notorious corrupt thrift in Northern California. A point of disclosure: I was one of three co-authors on the book "Inside Job"...
Amstar Financial Services of Jupiter, Fla., has announced the restructuring of its Synergy Mortgage Solutions correspondent lending platform. The company said Synergy has been relocated to Amstar's Miami facilities, where it will be managed by Charles Kluck and other Amstar executives...
New York area mortgage lender Astoria Financial will report its fourth-quarter earnings on Thursday, Jan. 22...
STATISTICS: Two lenders -- Doral Financial and Mortgage Investors Corp. -- funded nothing but fixed-rate loans in the third quarter, according to the Quarterly Data Report. Short positions in Ocwen Financial's stock rose 42% in December. The National Association of Realtors thinks the median existing home price will rise 4.6% this year to $178,657. A baby boomer turns 50 every nine seconds or so.
WASHINGTON NEWS: Rep. Don Manzullo to the Department of Housing and Urban Development on RESPA reform: Kill this baby now. Fannie Mae, which more than a year ago denied it was forming a political action committee, has -- you guessed it -- started a PAC.
MORTGAGE PEOPLE: Craig S. Davis, a former president of Washington Mutual's home loans and insurance services group, has joined the board of directors of Ellie Mae. Former Treasury undersecretary Peter Fisher is joining BlackRock Financial. Countrywide Financial has given its chief operating officer, Stanford Kurland, the added title of president. Meanwhile, company veteran David Sambol has been named president and chief operating officer of Countrywide Home Loans, a sub of the parent. As you might recall, the CFC president's title belonged to Angelo Mozilo. Mr. Mozilo now holds just two titles: chairman and chief executive. Mortgage industry veteran Barry P. Epstein has been named to the newly created position of managing director of wholesale lending at American Business Financial Services of Philadelphia.
IN CASE YOU MISSED IT: HanoverTrade Inc., a subsidiary of Hanover Capital Mortgage Holdings , and its technology partner, Intraprise Solutions, have announced the successful installation of the latest version of the Hanover/Busch Analytics mortgage servicing rights evaluation system at Wells Fargo Home Mortgage . Wells is the nation's second largest servicer.
WATCH ON THE 10-YEAR: The yield on the 10-year was at 4.086% on Friday and falling.
MORTGAGE DATA NOTICE: The M&A market could be heating up. If you want access to the " National Mortgage News M&A Database" (with information going back to 1996) contact Deartra Todd at Deartra.Todd@ThomsonMedia.com. National Mortgage News has sent out its fourth-quarter 2003 loan production/servicing survey. If you want to participate please contact Ms. Todd. And if you need results for the past three quarters on top lenders, servicers or channel breakdowns also contact her as well.
