Critics of Fannie Mae and Freddie Mac have long argued that the two have an unfair lock on theautomated underwriting market, but legislation introduced last week (S. 190) could break that hold. The bill wouldrequire a new GSE regulator to review their AU systems and to set parameters on their secondary market activitiesso that Fannie and Freddie cannot participate directly or indirectly in the underwriting of a mortgage...
A few years back the Mortgage Bankers Association issued a "Bright Line Test" white paper thatdiscussed where the primary market ended and the secondary market began. In that white paper, under a column called"New GSE Paradigm," the trade group noted that Fannie and Freddie's clients were no longer traditionalmortgage banker seller/servicers but instead were lenders, loan brokers and consumers. Not lost on the MBA (aswell as anyone in the industry) was the thought that the GSEs' national media ads (TV, radio, national print publications)were geared toward consumers. It other words, it used to be that the GSEs' customers were mortgage bankers -- notconsumers. The same BLT report noted that GSEs were executing agreements directly with Realtors and homebuildersand were steering consumers to seller/servicers that they favored...
Philadelphia subprime funder American Business Financial Services hit the wall last week, filing forChapter 11 bankruptcy protection. At the end of September its balance sheet boasted $490 million in "subordinatedunsecured notes" or SUNs. What's a subordinated unsecured note? When I was a cub reporter back in the mid-1980sthat's what Charlie Keating's Lincoln Savings was peddling to unsuspecting customers of the S&L, particularlythe elderly. In layman's terms, a SUN is an uninsured deposit (the key word here being "uninsured") whichis not guaranteed by Uncle Sam. According to the company's bankruptcy filing, the company's largest unsecured creditorsare the Stewardship Center in St. Louis, and John and Elieen Malack of Endicott, N.Y. Both are owedabout $2 million. Neither could be reached for comment...
So, will the Federal Reserve keep hiking short-term rates? Consider this: GDP growth in the fourth quarterwas softer than expected which means inflation should be tame (except for oil prices, of course). No inflationmeans no more rate hikes. At last check the 10-year was yielding 4.13%. That means mortgage rates should remainlow...
More than a week ago National Mortgage News was among the first to report about a new FriedmanBillings Ramsey study on price bubbles in 27 "urbanized areas." CNBC picked up the story onThursday, without mentioning NMN of course, but what else would you expect from Kudlow & Cramer,the Abbott & Costello of financial journalism...
The growing popularity of interest-only home loans in the subprime mortgage market "may trap unwary NewYork metro area homebuyers into situations from which the only exit is default and foreclosure," accordingto Foreclosures.com. Then again, funders of the loans have told NMN they're more than comfortableoriginating these credits...
And just which firms are the IO market leaders? You'd have to purchase NMN's new "AlternativeProducts Quarterly Data Report." Questions? Contact:
@ThomsonMedia.com
Meanwhile, Wells Fargo Home Mortgage, Des Moines, has announced the introduction of an interest-onlyadjustable-rate mortgage that doesn't require a principal payment for 10 years...
Franklin Bank Corp. of Texas continues to be a busy little acquisition bee. The Lew Ranieri-ownedbank has agreed to acquire the First National Bank of Athens in a stock and cash deal worth $58.3 million.The move further expands the MBS godfather's Texas community bank network...
Subprime lender Saxon Capital is coming to market with a $1 billion ABS deal...
Subprime servicer Fairbanks Capital (which has had its share of regulatory problems) is being boughtby Credit Suisse First Boston. Fairbanks is now called Select Portfolio Services...
Interactive Mortgage Advisors is selling a $294 million portfolio of alt-A private investor servicing.IMA notes, "The successful purchaser will be capable of completing its due diligence and execute a purchaseand sale agreement with a sale and transfer date of February 28, 2005"...
WASHINGTON NEWS: Residential mortgage production will decline each year through 2007, according to anew forecast released by MBA. The trade group believes the industry will fund $2.542 trillion this year, $2.206trillion next year and $2.115 trillion for 2007.
MORTGAGE PEOPLE: Deloitte & Touche has hired investment banking veteran Brenda White to headits consumer and financial services department. Ms. White will be responsible for the accounting firm's investmentbanking advisory work. Pablo Sanchez has been promoted to managing director of retail lending at CitiMortgage,St. Louis. Daniel Shaw joins IndyMac as business development manager for wholesale subprime lendingin its Riverside, Calif., region. Lime Financial of Oregon has named Philip Mikolaj senior vice presidentfor information technology.
LOAN OFFICERS TAKE NOTE: NMN, Origination News and BrokerUniverse have just launched theirfirst-ever "loan officer" survey for 2004. The aim of the survey is to get a better handle on the LOmarket. Rankings on the nation's top LOs will appear later this year in these publications. If you're an LO fora mortgage banker, broker, or even a wholesale account executive contact:
@ThomsonMedia.com
DATA NOTICE: NMN is still offering research reports on "LOS Systems," "D2CInternet Lending" and "Retail Lending Over the Internet." For more information contact:
@ThomsonMedia.com
