When the going gets tough, the tough members of the Federal Home Loan Bank of Seattle start redeemingtheir stock. A glance at trading records reveal that Seattle members redeemed one-million-plus shares of classB(1) stock in the fourth quarter compared to just 123,196 in the first. The troubled bank's five nonmember directors-- with the help of a law firm the GSE will not identify -- are investigating two directors whose institutionsmay have redeemed stock (in the fourth quarter) based on inside knowledge they may've had. For more updates onthe scandal see Monday's edition of National Mortgage News...
Meanwhile, more and more industry executives are starting to wonder where the Federal Housing Finance Boardhas been during all this time. Instead of investigating the Seattle stock sales itself the agency is letting theFHLB handle the matter itself. (In some circles this is known as "outsourcing.") One veteran investmentbanker, requesting his not be used, had this to say: "Seattle was running an arbitrage operation. Where wasthe regulator and what was the board doing all this time?" A few years back, FHFB chairman John Korsmofired most of the agency's media department, promising to use the money to hire more examiners. Mr. Korsmo, though,is now looking at a jail sentence for lying to Congress. Pile all this on top of the fact that FHLB president NormRice (a former mayor of Seattle) was forced out earlier this year and the FHLB's CFO, a 20-year veteran ofthe GSE, left in December, you have a nice little story. Too bad no one in Congress is paying much attention...
Then again, Congress is focusing on what exactly it should do in regard to portfolio caps for Fannie Maeand Freddie Mac. If caps become a reality, one MBS investor told us it will result in "the biggestwealth transfer in American history." That transfer will occur when $1.2 trillion in mortgages and MBS heldby Fannie and Freddie wind up at these four commercial banks: Bank of America, Citigroup, J.P.Morgan Chase and Wells Fargo. You can bet that before this happens Freddie Mac, at least, will chuckits charter. It has the capital...
Was former Fannie Mae chairman and CEO Franklin Raines watching CSPAN when interim CEO DanielMudd told the Senate Banking Committee that "Fannie Mae applauds the professionalism of the entireOFHEO team"? This past fall, Mr. Raines' opinion of OFHEO was, well, pretty low. He blamed the agency,and not himself, for Fannie's problems. Mr. Raines, meanwhile, is still listed as a general partner of the WashingtonBaseball Club, which is trying to buy the Washington Nationals baseball team. The WBC continues to carrythe former Fannie chief's picture and bio on its website. The group, though, might want to update Mr. Raines' bio.It still has him listed as being the chairman and CEO of Fannie...
Federal tax receipts are turning out to be a little higher than expected. Could it be that real estate investors (read speculators) are flipping properties and driving up pricesare responsible?
This past week, credit-card giant MBNA posted first-quarter earnings below Wall Street expectations andwarned that its 2005 earnings-per-share growth will fall below its previous target. When the news came out itsshares were clobbered. MBNA is buying private-label funder Nexstar. Perhaps the folks at Kohlberg KravisRoberts might want to reconsider selling to MBNA...
New York State mortgage bankers take note. The state hiked the state mortgage tax effective June 1. The increaseis 0.005 per thousand on the loan amount. However, the tax hike does not affect all counties...
Subprime funder First NLC Financial Services announced the opening of its new, fully operational correspondentlending division. The business is based in Overland Park, Kan. First NLC's correspondent divisionwill buy nonprime and alt-A flow and bulk transactions up to $15 million in size...
Puerto Rico's largest mortgage lender, Doral Financial Corp. said it may restate itsearnings for 2000 through 2004 to decrease the fair value of its portfolio of floating-rate interest-only stripsby $400 million to $600 million.
WASHINGTON NEWS: Speaking at the MBA's national policy conference this past Tuesday, former presidentialcandidate Sen. John Kerry of Massachusetts polled his audience on their political stripes. About 70% ofthe audience raised their hands, signifying that they are registered Republicans. About 20% identified themselvesas Democrats with the balance claiming to be independents. Sen. Kerry didn't have a whole lot to say specificallyabout mortgages though he predicted that the industry will see "bright-line test" language in a finalGSE bill. At one point he referred to Fannie and Freddie as "Freddie Mae and Freddie Mac." Sen. Kerryshouldn't feel so bad about his verbal gaffe. Republican Sen. Chuck Hagel of Nebraska referred to GSE reformas "GSA" reform.
MORTGAGE PEOPLE: Home-equity lender DeepGreen Financial has named Jennifer S. Creech chiefproduction officer. Ms. Creech will be responsible for developing DeepGreen’s sales force. The National HomeEquity Mortgage Association has elected Debbie L. Rosen its 2005-2006 chairman. Ms. Rosen is managingdirector, specialty lending for Countrywide's wholesale group. James E. Gilleran, director of the Officeof Thrift Supervision since 2001, has announced that he will step down on April 29. David Van Ess hasbeen named executive vice president of national operations at the LOGS Network, a Northbrook, Ill.-basednetwork of attorneys, trustees, title personnel and collection staff that represent lenders.
BROKER PUBLICATIONS YOU NEED TO READ: NMN's Broker magazine and Origination News.
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DATA NOTICE: NMNhas just published its Annual Data Report, which provides rankings on the top 100 prime and subprime lenders and servicers -- plus channelbreakdowns -- and much more. Also available: NMN'snew Alternative Products Quarterly Data Report, whichhas rankings on the top interest-only, alt-A and jumbo lenders. For more info about these products, contact
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