It appears that Wells Fargo Home Mortgage was the skunk at the MBA garden party where 30 or soheavy hitters met to discuss Fannie Mae and Freddie Mac possibly slashing their minimum servicingfee to 12.5 basis points. One participant told National Mortgage News that Wells made a presentationat the Thursday meeting showing that it is "significantly opposed to a cut." The participant, requestinghis name not be used, added that he felt "a lot of Wells' arguments were pretty contrived." As one mortgageexecutive put it: "It's all about capital. Wells has more of it than everyone else." A cut in the servicingfee would help servicers because they could sell more of the servicing "strip," lessening the need tohedge the asset and hold cash against it. For the full story see Monday's edition of NMN. Don't subscribeto NMN? Call (800) 221-1809...
Also in Monday's NMN, reporter Tony Garritano's story on Fannie unveiling a new plan to cut thecost of originations by $500 using new technology, and Lew Sichelman's piece on some lenders paying bigbonuses to land mega-producers...
As expected, the Federal Reserve hiked short-term rates by the expected 25 basis points. GreenwichCapital expects the Fed to hike by 25 bps at all eight meetings this year. (One down, seven to go.) If Greenwichis right, that means short-term rates will be at 4% by year-end. So where will that put mortgage rates? Good question.Do mortgage bankers smell a major profit margin squeeze coming? By hiking rates is Fed chief Alan Greenspantrying to end the "irrational exuberance" in the housing market? (My opinion.) Stay tuned...
Cendant Corp. this past week finally got around to spinning-off its mortgage and fleet unit, which isnow called PHH Corp. PHH employees, including president and CEO Terry Edwards had the honor of ringingthe opening bell at the NYSE. Unfortunately, the firm's stock traded down 3.25% on its first day, Thursday,but then recovered nicely and then some on Friday. It has a market cap of more than $1 billion...
We know that insurance companies no longer like the mortgage business (witness last year's sale of PrincipalResidential Mortgage to Citigroup) and now we know that banks don't like the insurance business (Citi'sunloading of Travelers Life & Annuity to MetLife) so that probably means the whole concept ofcross-selling financial service products to consumers is moot...
This Sunday's big game (the Super Bowl) is being sponsored by (among many others) Ameriquest, the nation'slargest subprime funder (according to NMN's Quarterly Data Report). As part of its marketing, Ameriquestsponsored the "Live Like a Legend Sweepstakes" where the winner gets two tickets to the big game, plusair, hotel and admission to the "halftime show talent's private rehearsal." In case you're wonderingJanet Jackson isn't part of the show this weekend. Instead they have someone who has already promised therewill be no "wardrobe malfunctions" -- Sir Paul McCartney. Sure, but will Ringo be there?
COMMERCIAL MORTGAGE-RELATED NEWS: Office vacancy rates in Midtown Manhattan are now at 10%, a point atwhich shortages begin occurring, especially for companies that are looking for large blocks of space...
Wednesday was the centennial of writer Ayn Rand's birth. Many, many moons ago the author of "AtlasShrugged," "The Fountainhead" and other books used to hang out with a very young Alan Greenspan...
New York real estate magnate Howard Milstein (who also owns Emigrant Savings Bank) is launchinga new private bank that caters to the ultra rich. (New York has a few of those.) The new firm will help the well-to-dowith everything from hedge funds to bonds. Can mortgages be far behind?
Standard & Poor's says it has evaluated the impact that anti-predatory lending statutes have hadon the funding of "high-cost loans" through the capital markets. The rating agency said it found thatonly 0.01% of the U.S. residential mortgage loans it rated during 2004 were high cost...
WASHINGTON NEWS: On Wednesday, Feb. 9, Rep. Richard Baker's GSE subcommittee will hear testimonyfrom Securities and Exchange Commission's chief accountant regarding his recent decision that Fannie Maeviolated accounting rules. The GSE is facing a $9 billion earnings restatement (downward) due to its apparent misinterpretationof FAS 133. On the very next day, Thursday, the Senate Banking Committee will examine the role played byFannie Mae, Freddie Mac and the Federal Home Loan Banks in the housing markets. John Weicher, assistantsecretary of the Department of Housing and Urban Development, will testify along with other housing experts.
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 a LO fora mortgage banker or broker 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
