This just in: fourth - quarter production volumes were decent, but all lenders (prime and B&C alike) sufferedfrom the profit margin blues. According to upcoming 4Q edition of the Quarterly Data Report, residentialfunders originated between $750 billion and $850 billion in the quarter. To preorder the QDR, e-mail
Payment-option ARMs have garnered a ton of negative press because of their risk to consumers but what aboutlenders? Here's the concern: when a borrower with a POA chooses the "negative am" option the lender whomade the loan gets to book the interest payment as "accrued" even though the institution has not actuallyreceived the money from Joe and Mary Six-Pack. The more negative-am POAs a lender has on its books, the greaterthat receivable. Follow me so far? Good. From what I understand, that accrued interest can be booked as income.In other words, the lender gets to count something as income even though it actually hasn't received the cash yet.Now, maybe there's nothing wrong with that but it sounds very close to the gain-on-sale debacle that cratered thenonprime industry back in 1998/99. One analyst suggested to me that accrued (but uncollected) interest isn't sobad as long as the loans are properly underwritten. He also suggested that accrued interest results in a receivablebeing created that costs next to nothing. But here's one other issue to consider -- if the firm with POAs is aREIT and it's hooked on paying dividends, what happens when volumes and profit margins hit the wall? We shouldhave our answer by year-end. Then we'll see who's left standing...
If you're looking for job security in these tumultuous times, don't become the president of a subprime shop.Frank J. Curry, president of nonconforming lender Acoustic Home Loans, Orange, Calif., has left thecompany, industry sources told National Mortgage News. Also out in the cold: John Vella whoresigned as president of Aames Investment Corp., a REIT. Aames was one of the few "lucky" publicB&C firms to survive the meltdown of 1998/99. Meanwhile, we hear that at least one other CEO of a B&C shopwas axed this past week. We have a name but it's unconfirmed...
One advisor told us that Irwin Financial -- which is exiting the conventional mortgage market by unloadingits prime business -- was recently in the market looking to buy a subprime firm. Irwin, by the way, is keepingits home-equity division...
Countrywide Home Loans, which rarely acquires other shops, may actually buy something soon. For the fullstory see Ted Cornwell's story in Monday's NMN. Let your subscription lapse? Call: (800) 221-1809
From Countrywide's earnings release: "For nonprime products, the gain-on-sale margin decreased 114basis points from the previous quarter and 249 basis points year over year"
Do you hold a mortgage(s) on the house(s) of Oracle CEO Larry Ellison? According to press reports,Mr. Ellison owes five different banks $1 billion and is $328 million shy of tapping out his line of credit. Notto worry, though. Mr. Ellison (a jumbo mortgagor, no doubt) owns Oracle stock that is worth north of $15 billion...
ResMAE Mortgage of California has launched a commercial lending operation in California that will specializein multifamily properties of five units or more...
SURVEY NOTICE: Mortgage bankers and brokers -- NMN is gearing up for its annual production survey.If your firm wants to be ranked, send an e-mail to
WASHINGTON NEWS: RESPA reform remains on the low back burner at the Department of Housing and UrbanDevelopment as Katrina and other issues dominate the department's agenda, officials told NMN's BrianCollins. However, RESPA reform will always be an important issue at HUD, said one veteran of the RESPA wars."At HUD, RESPA reform is like herpes -- you can't get rid of it," he said. Meanwhile, the percentageof homeowners in hurricane-stricken New Orleans that are 90 days or more past due on their mortgage payments ismoving above 20%, according to the Federal Housing Administration.
MORTGAGE PEOPLE: New Century Financial has named Brad Morrice chief executive, effectiveJuly 1. He currently serves as vice chairman, president and chief operating officer. Current chairman and CEO RobertK. Cole will remain solely as chairman. GSE booster (I'm being sarcastic) Alan Greenspan has been namedhonorary advisor to U.K. Chancellor of the Exchequer, Gordon Brown. (The Chancellor is the title held bythe British cabinet minister responsible for all financial matters.) Mr. Greenspan last week retired aschairman of the Federal Reserve. Assurance Partners Bank is changing its name to American Partners Bank.It has hired R. Hugh Rial Jr. as president of retail and commercial banking activities. APB is controlledby former Fannie Mae executive Stuart McFarland. Freddie Mac has named Robert Bostromexecutive vice president and general counsel. Mr. Bostrom joins Freddie from Winston & Strawn.
DATA NOTICE: For a limited period of time NMN is offering discounts if you purchase the MortgageIndustry Directory along with the Quarterly Data Report. For more details, e-mail
