A criminal referral is a form a regulator files with the Justice Department, signaling the regulator'sbelief that an institution (or a person working at that institution) has done something wrong that warrants a criminalinvestigation. After a criminal referral is filed, the next step is to assign agents from the Federal Bureauof Investigation to, well, investigate. Two weeks ago, The Wall Street Journal and other mediaoutlets reported that the Justice Department had launched a criminal probe of Fannie Mae's accounting practices.When the Journal first ran the story, Fannie spokesman Chuck Greener told the newspaper that he had no knowledgewhatsoever about a DOJ probe. Presumably, if a criminal referral had been filed on Fannie it would've been filedby its regulator, the Office of Federal Housing Enterprise Oversight. Well, guess what? On Wednesday ofthis past week, OFHEO director Armando Falcon Jr. told Rep. Richard Baker's subcommittee that hehad not filed a "formal criminal referral" with DOJ. To me, no referral means no criminal probe -- whichmeans all those media outlets were wrong. We also picked up the Journal's scoop and ran with it. No mediaoutlets, except National Mortgage News, seemed to care that Falcon had said he didn't file a criminalreferral. And even after Mr. Falcon made his comments, plenty of reporters continued to write stories referencinga criminal probe of Fannie Mae. But is there an official criminal investigation or is DOJ making informal inquiries?The difference between an official probe and a mere "inquiry" is huge. DOJ needs to clarify this pointASAP...
During Wednesday's hearing, Rep. Michael Castle, R-Del., tried (it seemed) to console Fannie Mae chairmanFranklin Raines about all the nasty things being written in the newspaper about him and his company. "We'reall running for office here and our opponents are accusing us of all sorts of things," said Rep. Castle toMr. Raines. Mr. Raines replied: "Yes, but you're not being accused of a crime. It's a little different." Back to you congressman...
At the hearing, Rep. Baker released confidential information showing that Fannie paid its top 23 officers $12.4million in bonuses in 2002. Fannie fought hard to prevent the bonus list from being made public and even employedWhitewater special counsel Ken Starr to fight its dissemination...
Missing in action at last week's hearing: Fannie Mae "whistleblower" Roger Barnes. For thefull story as to why, see Monday's National Mortgage News...
Also in Monday's NMN, a story by reporter Jennifer Harmon about the real estate bubble bustingin Las Vegas. One resident there (an ex-NMN employee) told us he bought a house in a tony Vegas subdivision for$260,000. That was a year ago. The same model ran up in price to $420,000. Within the past month, the builder,Pulte, had cut the price to $299,000. Can you spell bubble?
Genworth Financial, which owns the nation's fourth-largest mortgage insurer, posted a 57% increase inits third-quarter profit. Genworth is part of FM Policy Focus, an anti-Fannie/Freddie group...
Navy Federal Credit Union, the largest credit union in terms of mortgage production, has a new presidentand CEO -- Cutler Dawson. Mr. Dawson is chief financial officer of the U.S. Navy. Mr. Dawson, a three-staradmiral currently serving in Bahrain, will succeed Brian McDonnell, who is retiring after 35 years...
According to the Credit Union Journal, credit unions may be at a disadvantage to other mortgagelenders when it comes to experience or convenience, but not when it comes to costs. Daniel Mudd, chief operatingoffice for Fannie Mae, said recently that CUs can close loans much more cheaply than other lenders -- $883 comparedto $1,689 for other lenders. Some credit unions, he said, are able to close mortgages for as little as $354...
In late September, S&L Downey Financial said its board had terminated its authorization to repurchaseshares of its common stock...
Publicly traded subprime giant New Century Financial Corp. has changed its stock symbol to "NEW"from "NCEN." It also has bolted the tech-heavy Nasdaq for the gentler waters of the New YorkStock Exchange...
Subservicer Ocwen Financial Corp. of Florida has acquired German bank Bankhaus Oswald Kruber KGfor 7.25 million euros. BOK holds a universal banking license issued by the German Federal Financial SupervisoryAgency and is a member of the German Deposit Protection Fund...
WASHINGTON NEWS: House and Senate tax writers working on a huge corporate tax bill have rejected a proposalthat would create a tax deduction for mortgage insurance premiums. As Brooklyn Dodger fans used to say: "We'llget 'em next year"...
MORTGAGE PEOPLE: The Government National Mortgage Association has named Michael J. Frenzits new executive vice president and chief operating officer. NovaStar Financial has named H. Lynn Ryansenior vice president and chief information officer of its loan origination units. Tech provider Fiserv Inc.said last week its president and CEO Leslie Muma will retire in June 2006. Downey Financial said EVP TomPrince also will assume the additional responsibilities of chief operating officer of both Downey Financial and Downey Savings and Loan Association.
MORTGAGE DATA/RESEARCH NOTICE: Want fresh, up-to-date stats on the subprime and prime market? Want alist of the top funders in the first-half, including all channel breakdowns? NMN's new "Mid-Year DataReport" is now ready. For more information contact Deartra Todd at (202) 434-0320 or email:
@ThomsonMedia.com
@ThomsonMedia.com
