In a brief interview with National Mortgage News last week, Countrywide CEO Angelo Mozilopredicted that the industry's correction will last at least another two years. He believes that significant consolidationis now underway. Another executive told us that "we're about one-third of our way through this mess."Profit margins continue to be tight in both the prime and subprime sectors...
When the going gets tough the tough start exercising their stock options. Fannie Mae directors AnnMcLaughlin Korologos and Joe Pickett in early May each exercised stock options valued at $126,250. Theoption exercise price was $31.56, according to information provided by EdgarOnline. Fannie's shares arenow trading at $50. (You can do the math on their potential profits.) A Fannie spokesman said the two had to exercisethe options because they were expiring. He said they paid "cash" for the shares and plan on holding them.Both are current board members and served under former chairman Franklin Raines. Mr. Raines, Mr. Pickettand Ms. Korologos -- and other executives and directors (past and present) -- are defendants in a shareholder lawsuitthat accuses them of turning a blind eye to the company's accounting woes because they were involved in "mutuallybeneficial relationships" with the GSE. The plaintiffs charge the group did not operate as independent directors.Fannie Mae is trying to get the lawsuit dismissed...
The Enron convictions were big news this past week and mortgage executives are starting to wonder ifcriminal charges might be brought in the Fannie Mae case. The Office of Federal Housing Enterprise Oversightand Securities and Exchange Commission formally accused the company and its former top executives of fraud.Of primary interest to criminal investigators are the 1998 bonus payments. One industry veteran who has workedon fraud cases told us that breaking the rules to make money is a "criminal act" and adding that "peoplego to prison for that." (Millions of dollars in bonuses were paid that year.) The obvious question in theFannie case is who was responsible for bending the accounting rules and what did they do -- and when...
Meanwhile, at least one veteran Fannie supporter is sticking with the GSE. National Association of Home Builderschief Jerry Howard said of the scandal, "What is past is done. I am only concerned about the organization’sability to do its job and move forward. And I don't think anything in this report impedes that." (The “report”refers to OFHEO's findings)...
NovaStar Capital, the warehouse division of subprime funder NovaStar Financial, has purchasedthe warehouse customer relationships of nBank NA, Commerce, Ga. NovaStar is getting warehouse relationshipswith 40 mortgage lenders...
IN CASE YOU MISSED IT: Accredited Home Lenders bought Aames Financial. Both are publiclytraded subprime lenders...
INTO THE WOODS: Title insurance giant Fidelity National Financial has acquired a 70% stake inCascade Timberlands LLC. Financial terms were not disclosed. Cascade Timberlands owns 293,000 acres of productivetimberlands on the eastern side of the Cascade mountain range in Oregon. "We intend to review all 26 propertieson the Oregon tree farm and determine the optimal use for each property," said Fidelity CEO William P.Foley.
MORTGAGES & WEATHER: Ten hurricanes may form in the North Atlantic this year and up to six may becomemajor storms, the National Hurricane Center said this past week. The National Oceanic and AtmosphericAdministration advised coastal residents to "prepare, prepare, prepare" for a very active storm season.So should lenders.
MORTGAGE PEOPLE: Lime Financial has named nonprime industry veteran Rick Contino vice presidentand Midwest regional sales manager. In his new position, Mr. Contino will oversee Lime's expansion in theregion. GMAC-RFC Securities, the broker/dealer affiliate of Residential Capital Corp., has hiredRobert Cole as managing director, head of trading and John Glessner as director, senior trader MBS.
MORTGAGE DATA & RESEARCH: NMN's "Annual Data Report" is still available.If you want detailed rankings on the nation's top 100 lenders in 2005 including breakouts on channels, servicing,plus subprime e-mail
