Now that New York attorney general Andrew Cuomo has subpoenaed mortgage-related documents from BearStearns, Deutsche Bank and Merrill Lynch, some of you might be wondering: whatever happened tothose two subprime-related hedge funds that Bear closed this summer? The short answer is they are kaput but couldbe back in the news shortly. The one thing none of us knows (and correct me if I'm wrong and I know there's readersout there who will) is who, exactly, the creditors of these two funds are. Bear has some sharp attorneys who aretrying to liquidate the funds through the Cayman Island courts. Do you know what that means? Bear doesn't haveto disclose who the creditors are — or much else for that matter. The reason companies go to the Caymans is this:you don't have to disclose much of anything. (I should've went to law school.) The two funds are called High-GradeStructured Credit Strategies Enhanced Leverage Fund and High-Grade Structured Credit Strategies Fund.The reasons the two funds might be in the news again is this: Bear says in a recent SEC filing that it has been"contacted by and received requests for information and documents from various federal and state regulatoryand law enforcement authorities" regarding the two funds. The phrase "law enforcement" would meaneither the AG's office or the Federal Bureau of Investigation. If you have any information regarding thismatter and/or how Bear’s trading desk and warehouse division worked in tandem the past few years drop me an e-mailat
Meanwhile, Moody's Investors Service has downgraded the ratings of 59 tranches of asset-backed securitiesheld by Bear. The collateral backing the classes is made up mostly of first-lien, fixed- and adjustable-rate subprimemortgages
As reported, Bear last week trimmed 600-plus jobs, some of them at the former Encore Credit Corp. inIrvine, Calif. ECC chief Shabi Asghar is still there, however. He did not return a telephone call last week
If all this talk of subprime hedge funds and CDOs has you confused, a comedy duo in the U.K. has come up witha clever (and humorous) skit that takes a stab and explaining the mess. Visit
Before the Russian "debt crisis" and the "gain-on-sale" accounting debacle wiped out halfthe subprime industry in 1998, Delta Financial had been talking to potential acquirers. One investment bankertold us that back then he had an offer on the table to sell Delta for about $300 million but Hugh Miller,DFC's CEO, turned it down. Midweek, Mr. Miller threw Delta into Chapter 11 bankruptcy protection. The company wasfounded in the early 1980s by Mr. Miller's father
A firm controlled by investor Gerald J. Ford has cut its stake in Downey Financial to 4.9%, twoweeks after revealing it had a 6.8% stake in the thrift
And now, finally for some good news. Not everyone is suffering. Genworth Financial's mortgageinsurance division saw its "bulk insurance" business increase by 248% in the third quarter, accordingto the Quarterly Data Report. The QDR, a National Mortgage News publication, also found thatBank of America, once again, ranked first among all retail mortgage lenders in the third quarter. To orderthe QDR send an e-mail to
INFORMATION NEEDED: I'm looking for a Connecticut loan broker named Mike Brown who a few yearsback got a huge signing bonus from a top-five lender to jump ship and become a retail loan officer. If you haveany information drop me an e-mail at
RAGS TO RICHES LO/LOAN BROKER STORIES: "Imagine my surprise when I attended a family reunion twoyears ago and found out that my niece's new husband is now a loan officer. Now mind you, he is a decent guy, butfor crying out loud he has zero training in finance and was previously waiting tables. It gets even better. Thenmy older sister comes to me and tells me that she is now a loan officer! Yikes, this girl is a hairdresser. Shecan't manage her own finances and of course has zero training as well!" — R.W. (Have a rags-to-riches LO/brokerstory? Send an e-mail to
WASHINGTON NEWS: The Treasury Department on Thursday unveiled its much-anticipated plan to forestallsubprime foreclosures by freezing ARM rates for five years. For the full details see Brian Collins' storyin Monday's NMN. Don't subscribe? Call: (800) 221-1809. (A subscription gives you free access toall the premium content on the NMN website.) Meanwhile former NAMB chief A.W. Pickel IIIhad this to say about the plan: "Where does the government get off thinking it can rewrite contract law?"He isn't the only one who expressed that sentiment.
MORTGAGE PEOPLE: National City Corp. said Paul (Buck) Bibb will retire as CEO of National CityMortgage effective in the first quarter of 2008. Joe Cartellone, current president of National CityMortgage, will succeed Mr. Bibb as CEO. The Office of Federal Housing Enterprise Oversight has namedChristopher H. Dickerson director of supervision.
DATA INFORMATION: According to the eMortgage Industry Directory, Wall Street firms ownresidential servicers that control $115.7 billion in subprime loans or roughly 8.52 % of the market. Need annualrankings and profiles on the top residential lenders and servicers? Need commercial mortgage banking informationas well? Try the eMortgage Industry Directory, an online book that tracks the nation's top 400 lenders,300 servicers, top 85 subprime and much, much more. The e-book also provides a special analysis on America's subprimecrisis. To order, e-mail
