Hail the yield on the 10-year Treasury. Mortgages are pegged to it and lending professionalswatch it carefully. This past week there was a ton of speculation that the Federal Reserve would hike theovernight Fed funds rate by August instead of December. Some economists are now even predicting June. Of course,the Fed doesn't control the yield on the 10-year. The market determines that. But if short-term rates rise, thatmeans lenders (to maintain current profit margins) likely will hike mortgage rates as well. As the industry wellknows, mortgage rates have been on the rise. As this weekend column went to press, mortgage and financial servicestocks had rebounded somewhat from the selling carnage of the past two weeks. It all started with that better-than-expectedjob report in early April. In a research note, Sandler O'Neill analyst Mike McMahon writes that thesell-off in financial service equities "specifically mortgage finance stocks" is overdone. But keep inmind that mortgage insiders (directors and officers) have been dumping shares like crazy the past six months. Majorselling by insiders has been going on at Countrywide, Fannie Mae, Washington Mutual and othershops. See Monday's National Mortgage News for more details...
Also in NMN's Monday edition, a story by Jennifer Harmon on how the head of the NewJersey Department of Banking is disputing findings by a University of Virginia finance professor who claims thestate's anti-predatory lending laws has hurt subprime volumes there...
Talking of subprime, NovaStar's share price has been getting hammered. Late last weekits stock was trading at $40, compared to a 52-week high of $70. Class-action attorneys have circled the wagons,filing civil claims that the company's executives have been misleading investors. NovaStar, meanwhile, has retainedthe services of Orrick, Herrington & Sutcliffe, to vigorously defend the lender against the securitieslawsuits. Serving as lead counsel on the case is William F. Alderman and Lanny J. Davis. Accordingto NovaStar, Mr. Alderman has "extensive experience in federal and state securities matters. Of his 45 motionsto dismiss securities actions in 1996-2003, 41 were granted in their entirety, three were granted in part, andthe remaining one led to a successful motion for summary judgment." Mr. Davis is known to many as specialcounsel to the Clinton White House. Stay tuned...
Cendant Corp. chairman Henry R. Silverman earned $54.3 million last year --$37.2 million of which came from exercising stock options. Cendant Mortgage has been on the auction block of late,but so far no word on the future of the lender...
On Monday, Sandler O'Neill said in a research note that it is reducing its rating on ImpacMortgage to "hold" from "buy" due to "the increasing negative investor sentiment onmortgage REITs even though we believe the current fundamentals remain sound." The very next day it noted that"Investor reactions to our downgrade ... were all over the map. Many thought we were too early, and at leastone thought we were too late"...
The National Association of Realtors says it has become the first trade group in theU.S. to exceed one million members -- dues paying members, that is. Of course, once the nation's housing bubblebursts...
WASHINGTON NEWS: Eight national lender organizations are calling on the House and theSenate to enact a national predatory lending standard to address the problem of abusive lending practices. "Theproliferation of state and local laws to address abusive lending practices is creating an uneven playing field,which disadvantages consumers and lenders alike," according to the open letter to Congress. The letter pointsout that the Office of the Comptroller of the Currency has pre-empted state predatory lending laws withrespect to national banks. But state-licensed lenders are forced to operate under a patchwork of state and localpredatory lending laws. "In order to ensure competitive and efficient markets, we urge Congress to set fortha national uniform standard for all lenders and mortgage participants patterned after OCC's action," the April12 letter says. The letter was signed by the Mortgage Bankers Association, National Association of MortgageBrokers, National Home Equity Mortgage Association and other groups...
On Wednesday, Alicia R. Castaneda presided over her first meeting as the new chairmanof the Federal Housing Finance Board. In her opening remarks she said, "I am very much a firm believerthat the Finance Board is -- and must be -- a strong, 'arm's-length' regulator of the Federal Home Loan Banks.And I will work very hard to ensure that this agency has whatever regulatory tools, staffing and resources it needsto fully discharge its safety-and-soundness and mission-related responsibilities, including the affordable housingprogram."
MORTGAGE PEOPLE: E*Trade has named industry veteran Terry Rowland nationalcorrespondent lending manager. Terry joins the online financial services provider from the Canadian-owned RBCMortgage. Irwin Mortgage has hired Grant Spurrell and Jeannine Balanky as regional accountmanagers. Mr. Spurrell will work in the Northeast region, Ms. Balanky in the North Central region. Master Financialhas promoted Mike Berkley to vice president and director of sales. Mr. Berkley has been with Master Financialfor 11 years.
MORTGAGE DATA NOTICE: Full-year production rankings (top 100 for prime and top 50 forsubprime) including channel breakdowns and much more are now available via NMN's new Annual Data Report.The ADR is an electronic spreadsheet sheet that is growing in popularity. To subscribe to the ADR contact DeartraTodd at (202) 434-0320 or e-mail:
@ThomsonMedia.com
MORTGAGE SURVEY NOTICE: NMN is still conducting its full-year 2003 productionand servicing survey. If you would like to participate, gaining free publicity for your institution contact Ms.Todd at the above.
