Thanks Fannie Mae. Just when housing finance reporters thought they could take it easy during the holidayseason, the mortgage giant's name has surfaced in regard to a new/old swindle -- this one involving $6.5 millionin funds that Fannie got from a scamming mortgage banker based in North Carolina. How did this happen? Fannie,as usual, isn't talking, but it appears Fannie itself was defrauded and instead of blowing the whistle on the bogusloans it bought, instead it made the mortgage banker (First Beneficial Mortgage) buy the loans back (orat least compensate it for the loans). Follow so far? Good. This, according to court records, is what happenednext: FBM repaid Fannie by taking cash it received from Ginnie Mae pools and transferring that cash to aFannie account at Branch Banking & Trust. Fannie then transferred the money over to its account at theFederal Reserve Bank of New York. All these transfers took place back in 1998-1999. The government believes"high level" officials at Fannie knew the money it received from FBG was "fraudulently" obtainedfrom Ginnie. (How, exactly, Fannie officials knew this has yet to be explained.) Fannie Mae VP of single-familyoperations Samuel M. Smith testified at trial in the original FBG case. (FBG's owners were convicted twoyears ago.) The government now wants the $6.5 million that Fannie received from FBG back. How come you haven'tbeen reading about this in the press? Because prosecutors have sealed the record. Why would they do this? Accordingto court records, to prevent the $6.5 million from being "transferred to other accounts or locations."Who could potentially move the money in question? I would assume Fannie. To boot, three key subcommittee chairmenare steamed and want an explanation. Could a congressional hearing be next? Stay tuned...
The home-equity market, especially, the "piggyback" loan market is hot, hot, hot, so much so thatit's hurting the mortgage insurance and credit-card sectors. For the full details -- as well as second-lien originationrankings -- see Monday's edition of National Mortgage News...
Meanwhile, NMN has a new product out called "The Alternative Products QDR." It has rankingson the top alt-A and second-lien funders and servicers. For more information contact
@ThomsonMedia.
A Washington consulting firm believes mortgage brokers who work exclusively for a federally chartered thriftwould not have to comply with state laws and regulations, but the Office of Thrift Supervision does notagree. The OTS recently issued a legal interpretation that extends the pre-emptions enjoyed by federally charteredthrifts to their agents...
The General Electric-owned WMC is considering entering the warehouse lending arena next year...
Subprime lender Delta Financial recently sold $600 million of securities backed by mortgage loans andis on track to meet its goal of funding $2.5 billion of mortgage loans this year...
Wachovia has initiated coverage on IndyMac Bancorp, calling it an "outperform." IndyMacis a top-ranked alt-A funder...
Rising mortgage rates are likely to trigger a jump in mortgage defaults in California by the second quarterof 2005, according to Foreclosures.com, a Sacramento, Calif.-based investment advisory firm...
IN CASE YOU MISSED IT: Countrywide Home Loans, the nation's second-largest subprime lender (accordingto the Quarterly Data Report), recently fired a regional manager for supposedly encouraging loan officers to steerborrowers with decent to good credit into nonconforming loans that carry higher note rates.
WASHINGTON MORTGAGE NEWS: The $388 billion omnibus appropriations bill that Congress is expected to passnext week chops funding for the president's American Dream Downpayment program by 75% to $50 million. Citing budgetpressures, House appropriators originally proposed to cut the president's $200 million request for the downpaymentassistance program to $85 million. However, Senate appropriators cut it to $50 million, expressing concerns aboutthe viability of the new program, which is supposed to help low-income renters become homeowners. See BrianCollins' story in Monday's NMN.
UPCOMING MORTGAGE CONFERENCE: National Mortgage News/ThomsonMedia will hold its 8th annual mortgagetechnology conference Jan. 30 to Feb. 1 in Miami. Keynoters include WMC's Amy Brandt, DeepGreenFinancial's Jerome Selitto, among others. To sign up call 1-800-803-6093.
MORTGAGE PEOPLE: IndyMac has named Cheryl Thompson business development manager for wholesalesubprime in its Northwest region. The company also named Lisa Graham correspondent account manager (correspondentservices) for its Northeast region. Genworth Financial's mortgage insurance group has named Richard Izenvice president, national field sales (East division), and Craig Rief vice president of government agencybusiness. AmeriCU Mortgage has named John Teweles as its president.
MORTGAGE DATA/RESEARCH NOTICE: The year is almost up and if you want to know who the mortgage "moversand shakers" of tomorrow might be check out NMN's new "20 (Mostly) Private Mortgage Firms toKeep an Eye on in 2005." For more information about the report contact
@ThomsonMedia.com
