At least five Wall Street firms are actively in the hunt to buy mortgage banking franchises, hoping to takeadvantage of profit-margin-challenged lenders that want to exit the business as the "cycle" winds down.(It's all about "vertical integration," folks.) For the full story see the Monday edition of NationalMortgage News. If you don't subscribe call: (800) 221-1809
And since we're on the subject of Wall Street and residential mortgages, a new report by Morgan Stanleysuggests that the love affair between brokerage firms and mortgages may be short lived. Penned by Morgan analystKen Posner and others, the report notes that some stockbrokers likely will "experience frustrationwith cyclical, operational and regulatory frictions"
As we all know by now, National City is putting its two subprime units (one a lender, the other a servicer)up on the auction block. The Cleveland bank is keeping its “A” paper unit, but some investment bankers have suggestedto us that it may be a matter of time before NatCity exits the that business as well. One ominous sign forNational City Mortgage: its first-quarter residential production fell by 41%, the largest decline amongthe top 20. The figures are courtesy of the Quarterly Data Report
NMN is about to release its new Mortgage Broker Database product. The new MBD has loan volumesof the nation's top 200 loan brokerage firms, the top producers at these firms and contact info on about 3,000firms overall. To order the MBD e-mail
We understand that loan "buybacks" (whereby secondary market investors request that originators purchaseback early payment defaults) continue to be a problem for many. One CEO of a small shop in Southern Californiatold us he's had six buyback requests so far this year compared to just three in 2004
On Tuesday the share price of subprime lender Encore Credit Corp. fell below $1 share, trading as lowas $0.95. Its 52-week high is $6.83
Here comes the economic slowdown: According to Greenwich Capital, manufacturing and trade inventoriesin May jumped by 0.8% -- more than Greenwich had expected. Retail inventories surged by 1.6%, the largest monthlygain since August 1994. Also, auto dealers' stocks jumped by 3.2%, considerably more than anticipated. Meanwhile,the stock market -- especially tech stocks -- are "dead money" and investors continue to plow cash intomoney market funds and bonds. What does this mean for residential lenders? All the cash investors are sitting onwill keep bond yields low, which is good for the mortgage industry. "Hard" assets will continue to dominate-- and that includes real estate. Yes, some home markets (New England) are softening, but where would you ratherput your money -- into Intel and Google or a nice little piece of land?...
ENDLESS SUMMER FOR BROKERS? NOT: The mortgage broker industry has a reputation of going anywhere at anytime to meet with a client, but the result is that family events are missed and connections lost. An AmericanExpress survey found that two-thirds of the small-business owners polled planned at least a week of vacationthis summer, but more than half said they would check in with their businesses at least once a day, according tothis feature from our sister publication Broker magazine.
WASHINGTON NEWS: The Office of Federal Housing Enterprise Oversight has directed Fannie Maeto suspend purchases of acquisition, development and construction loans until it fixes certain operational andcontrol problems. In an interview with National Mortgage News last week, Fannie president and chief executiveDaniel Mudd said OFHEO raised concerns about the adequacy of the ADC program's controls and procedures,and he agreed that improvements are needed. (NMN broke the story on its website.) For the full report seeBrian Collins' story in Monday's NMN.
MORTGAGE PEOPLE: American Home Mortgage of New York has hired six account executives away fromWashington Mutual. The six are Steven Campbell, Molly Gross, Mary Niederhaus, MaryO’Connell, Ed Robinson and Gordon Terry. WaMu began shutting down its traditional correspondentnetwork in May. The Mortgage Bankers Association has promoted Steve O'Connor to senior vice president,public policy. As expected, Brad A. Morrice has assumed the title of chief executive at New Century FinancialCorp. Mr. Morrice, who will continue as the company's vice chairman and president, succeeds Robert K. Cole, whoremains as chairman.
MORTGAGE DATA & RESEARCH: The new Mortgage Industry Directory is readyfor purchase. This 1,000-page book offers key industry rankings and contact info on the nation's top 400 mortgagelenders, top 100 subprime firms and much more, including key analysis (and tables) on industry loan volumes for2006 and beyond. Trying to figure out what trends will drive the industry's future? Order the MID. For moreinformation e-mail
