Before we contemplate Alan Greenspan's recent GSE comments, let's ask a basic question. Just how profitableis subprime lending, a business that Fannie Mae and Freddie Mac, as yet, don't play a huge role in?One executive -- requesting his name not be used -- told us that a "leading consultant" has surveyeda select group of nonconforming lenders and come up with the following: On a $125,000 loan the total income perloan is $9,295 and the total expenses are $6,435. That leaves average pretax income of $2,860 per loan. However,these figures are averages and more importantly, the research was done in the first half of 2004 when the yieldcurve was much, much steeper...
Thanks to Federal Reserve chief Alan Greenspan, recently ousted Fannie chairman/CEO Franklin Rainesneedn't worry about getting his stock options out of the company. Why? Because the way Fannie's stock has beenperforming lately those options must be worthless. On Friday, Fannie's stock hit a gut-wrenching 52-week low of$58 a share. The last time its share price was this low was back in early 2001. On Thursday, Mr. Greenspan toldthe Senate Banking Committee that Fannie and Freddie's mortgage holdings should be capped at $100 billionto $200 billion. Currently, the two own about $1.5 trillion. Huh? In other words, if this former devotee of fictionwriter Ayn Rand gets his way there's going to be a whole lot of MBS for sale -- and real soon. But willCongress go for such a limit? No one inside the Beltway thinks it will happen -- but real caps of some sort clearlyare now a possibility. Stay tuned...
Which major mortgage banker is looking for a new mortgage chief? Read Monday's edition of National MortgageNews. Also on the front page of Monday's edition is a photo of a major rock 'n' roll star. Here's a hint:It's not Davy Jones of the Monkees. If you don't subscribe to NMN the phone number is (800)221-1809...
Thrift originations of single-family loans totaled $603.3 billion in 2004, down 17.3% from the record set in2003. According to NMN's just-released Quarterly Data Report, all lenders funded $2.787 trillionin loans during 2004 which means the thrift industry had a mortgage origination market share of 21.6%. WashingtonMutual accounted for 42% of the thrift industry's production. Take WaMu out of the picture and it doesn't lookpretty for thrifts. If you need more info on the QDR contact
@ThomsonMedia.com
In other GSE news, Timothy Howard, who resigned from Fannie Mae in December (along with Mr. Raines) hasbeen named among the best chief financial officers in America, according to Institutional Investormagazine. The magazine's ranking of the best CFOs is based on a survey of portfolio managers and brokerage firmanalysts in 62 industries. Mr. Howard is the lone CFO selection in the "mortgage finance" area. Lastweek the magazine wasn't returning phone calls about its award...
The investment banking house of Sandler O'Neill has never been enamored by E-Loan. So when theonline lender reported fourth-quarter earnings that beat Sandler's estimate by a penny a share what did the WallStreet firm have to say? This: "Still looks overvalued," adding, "The outperformance was due tostronger-than-anticipated refinance revenues." Sandler analysts Richard Repetto and Todd Halkyare maintaining their "sell" rating on the stock. Meanwhile, E-Loan CEO Chris Larsen is steppingaside but will remain as chairman. In early February E-Loan amended a master repurchase agreement it had with MerrillLynch Mortgage Capital...
CBA Commercial of Connecticut is securitizing $102 million in commercial mortgage loans...
Subprime lender Delta Financial earned just $215,000 in the fourth quarter, blaming the poor showingon its switch to "portfolio accounting" from "gain-on-sale accounting." It funded a record$754 million in the fourth quarter...
MORTGAGE PEOPLE: Dan Hastings has been promoted to first vice president and head of correspondentlending at Irwin Mortgage Corp., Indianapolis. IndyMac Bancorp has named Paul McCabe firstvice president of its western region, in charge of nonprime lending. Radian Guaranty named Mark A. Casalesenior vice president, capital markets. In this role, Mr. Casale will be responsible for customized credit enhancementproducts on non-prime mortgages.
MORTGAGE BANKERS OF ALL SIZES TAKE NOTE: NMN has just launched its annual production/servicingsurvey for its Mortgage Industry Directory. If you would like a survey, contact
@ThomsonMedia.com
LOAN OFFICERS TAKE NOTE: NMN, Origination News and BrokerUniversehave just launched their first-ever "loan officer" survey for 2004. The aim of the survey is to get abetter handle on the LO market. Rankings on the nation's top LOs will appear later this year in these publications.If you're a LO for a 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
