The cross-selling of mortgages and insurance is dead! It shouldn't be though, right? It seemslogical that home loans and life policies would be a perfect cross-sell. But apparently not. Insurer PrincipalFinancial Group is exiting the residential business by selling its mortgage subsidiary to Citigroup.It would seem logical that insurance firms would love to own mortgage firms. Why? Because of the cross-sellingopportunities. If you have a mortgage, chances are you need life insurance, annuities -- take your pick. But, Iguess that argument doesn't hold water anymore -- otherwise Principal wouldn't be bolting the business. Keep inmind that 14 years ago Travelers sold its mortgage subsidiary to General Electric, and Prudentialleft mortgage town back in 1996. But there's one catch to all this -- Citigroup now owns Travelers Insurance. WillCiti ramp up the cross-selling of mortgages to its insurance customers and vice-a-versa? Stay tuned...
The Citi-Principal Residential deal has two interesting "back" stories. The firstinvolves the sale itself. According to one mortgage official, when NMN first reported back in Marchthat PRM might be on the block, two senior PRM executives at a company "top producers" meeting triedto reassure everyone in attendance that the report in NMN was not accurate. In the words of this official,by the time the two were done speaking, PRM's top producers (account executives, that is) were feeling hunky-dory.But then an executive from the parent insurance company got up and made a speech reminding everyone in attendancethat Principal is publicly traded and if a compelling bid is made for PRM the parent will have to consider it.The other back story has to do with PRM's regional correspondent offices. Most of PRM's production is correspondent-based.When a large deal like this happens, competitors usually try to raid the cream of the crop of the lender beingbought. This could happen at PRM...
The Federal Home Loan Bank System said on Monday that its 12 member banks posted combinednet income of $382 million in 1Q, a decline of 16.2%...
A 3% overnight fed funds rate wouldn't be so bad, would it? On Monday, Brian Westbury,chief economist at GKST Economics, said, "The Fed could triple rates tomorrow [to 3%] and Fed policywould still be accommodative. It is terrorism and Iraq that are driving stock prices lower, not the Fed"...
Ameriquest Mortgage, the nation's No. 1-ranked subprime funder (according to the QuarterlyData Report) has purchased the naming rights to the Texas Rangers ballpark in Arlington. The agreementis for 30 years. As we noted in last week's column, Ameriquest also owns part of the right-field fence at CamdenYards in Baltimore. Can Shea Stadium be next?
Washington Mutual once again ranked first among all residential servicers in Q1, accordingto Monday's NMN. WaMu, meanwhile, is constructing a 42-story office tower in downtown Seattle...
Mortgage Investment Lending Associates of Washington state has introduced a jumbo loanprogram to its current suite of residential loan products. MILA, known mostly as a subprime funder, will originatemortgages of up to $1,000,000...
CAUTION, LAWYERS PRESENT: Spokespersons for GE Mortgage Insurance are not sayingboo about the upcoming IPO of its parent, Genworth Financial. GEMI lawyers have told the PR folks therenot to mutter one single word about the IPO, which is slated for May 24. Moreover, once Genworth does go public,GEMI's PR people have been instructed (by their lawyers again) not to make outgoing phone calls about the IPO.Boy, it's a good thing GE isn't in the media business...
FEAR FACTOR: As short-term interest rates rise and demand for mortgages eases, manyinvestors will be looking to sell mortgages, said Fannie Mae chairman Franklin Raines last week."Without our mortgage portfolio, both investors and consumers would feel the pain," said Mr. Raines.
WASHINGTON NEWS: The White House, anticipating that Congress will not pass a GSE regulatorybill this year, is asking legislators for an additional $19.3 million to fund the operations of the Office ofFederal Housing Enterprise Oversight. The White House, in a recent budget request sent to Congress, asked legislatorsto increase OFHEO's total funding by 48% to $59.2 million. The money, though, is for fiscal year 2005, which startsOct. 1.
POLITICAL COVERAGE: In the past, some readers of this column have expressed their dismaythat their favorite trade newspaper (that would be NMN) is getting much too involved in political commentaryon the upcoming presidential race. With that in mind, we'll try to curb such commentary. However, we'll point outfor the record that not one political cartoonist has yet to capitalize on the amazing resemblance of Democraticfront runner John Kerry to the characters drawn by Mad magazine cartoonist Don Martin...
MORTGAGE DATA NOTICE: National Mortgage News, for a limited amount of time,is offering a new special industry research white paper entitled "15 Mortgage Firms to Keep an Eye on in 2004& 2005." For more information contact Elizabeth Washington at (202) 434-0328 or email
@ThomsonMedia.com.
IN RETIREMENT: NMN is losing its long-time art director Eclid Villarosato retirement. In my 20 years of publishing I have never worked with an art director/pagination specialist astalented and as dedicated as Eclid. He has been one of the unsung heroes of NMN and its affiliated publications.We at NMN wish Eclid and his family a happy retirement.
