Could it be that the mortgage industry would get through a whole week without another firm of note failing?By Wednesday, it looked as though it might happen, but then rumors began to sprout up that Mandalay Mortgagewas closings its doors. The news was first reported by National Mortgage News Online(MortgageWire). One subprime executive we know described the current state of affairs (forsubprime non-depositories) as "horrendous," saying it's tantamount to a "liquidity crunch."He said many Wall Street warehouse providers are looking at the cash positions of their clients "hard andheavy"
Meanwhile, the future is looking yet even dicier for Mortgage Lenders Network of Connecticut.The nonprime wholesaler -- which is now out of wholesale, its primary channel -- killed a deal to sell a chunkof its servicing portfolio. For the full details see Monday's NMN. (Don't subscribe? Call: (800) 221-1809).Sources tell us bankruptcy is now a possibility. Also, questions are being asked about how MLN's woes are affectingits affiliate in the Virgin Islands, Emax Financial. Emax and MLN are not talking
Mortgage bankers aren't the only ones struggling in the current environment. The publicly traded HouseValuesthis past week said it is exiting the lead generation business
Remember Bill Templeton, a former president of The Money Store who was a pioneer in developingthe subprime sector? He's been named chief operating officer of Liberty American Mortgage, Roseville, Calif
If you think the housing correction is just about over, think again. D.R. Horton Inc., the homebuilder,predicted that the housing market will bottom out this summer and remain only flat or slightly up into next year."We're about 12 months into this slowdown," said CEO Don Tomnitz
Besides being hammered by lower mortgage volumes and buybacks, mortgage bankers are suffering from a flat tonegative yield curve. But not all firms are suffering totally. Jumbo specialist Thornburg Mortgage reportednet income -- before preferred stock dividends -- of $298 million in 2006
And what about early payment defaults? According to Standard & Poor's, EPDs "may occur for variousreasons, including loosened underwriting, layered risks, macroeconomic conditions, origination fraud and governmentregulation. Underwriting guidelines may have been loosened as lenders competed for borrowers."
He was chairman of a housing subcommittee and now he's headed for the "Big House." That would be formerRep. Bob Ney, Republican of Ohio who last week was sentenced to 30 months in prison for conspiracy to commitfraud and other charges in connection with the Jack Abramoff scandal. The good news? He can start collectinga full annual pension of $29,000 per year in 2016. Who says crime doesn't pay?
WASHINGTON NEWS: We're hearing that Sen. Chuck Schumer, D-N.Y., may wind up with the chairmanshipof the Senate Housing Subcommittee. Sen. Schumer was a guest on "The Daily Show with Jon Stewart"Thursday night. He did not bring up the matter on the show. And despite what we've been told (for months), AlphonsoJackson remains as secretary of the Department of Housing and Urban Development.
MORTGAGE PEOPLE: Troy Gotschall has resigned as executive vice president and chief productionofficer of ECC Capital Corp., a REIT that controls subprime wholesaler Encore Credit. PreferredFinancial Group of California has named Ron Wilsie chief operating officer, and Gary Ploosterchief production officer. American Brokers Conduit, the wholesale arm of American Home Mortgage,has hired Doug Hatch as vice president and manager of its Las Vegas branch. The National Associationof Mortgage Brokers said its president Harry Dinham will serve on Fannie Mae's National HousingAdvisory Council.
SURVEY NOTICE: Loan officers take note -- NMN's annual survey of LOs is now ready.
MORTGAGE MEETINGS: There's still time but not much. It's the best mortgage technology show in the business.That would be National Mortgage News/SourceMedia's 10th annual MT conference, which is beingheld Jan. 28-30 in Tempe, Ariz. For more information call (800) 803-3424.
DATA NEWS: NMN has just raised prices on its popular Quarterly Data Report and AlternativeProducts Quarterly Data Report. The QDR tracks the nation's top lenders with breakouts on subprime and servicing.The AP-QDR focuses on second-lien funders, alt-A lenders, payment-option funders and more. For more info contact
