In some quarters it's being called a liquidity crisis, the likes that haven't been seen in the subprime sectorsince 1998. On Friday, National Mortgage News Online reported that Merrill Lynch was makingmargin calls on certain warehouse customers, asking these non-depositories for more capital. Meanwhile, we're toldthat higher-ups at Merrill are questioning why it bought First Franklin -- and why it paid so much moneyfor it. Will heads roll at Merrill? A spokesman there told us that yes, margin calls are occurring, but the companyis more than happy with First Franklin. We're also told that some Wall Street firms are getting ready totrim back their warehouse lending operations. Which Wall Street firm will be the first to run screaming from theindustry, shouting, "What have I done? What have I done?" Stay tuned
Lenders Direct CEO Mike McQuiggan had this to say about the subprime carnage: "I see ourindustry in true recession right now. It's touching everybody." LD closed its wholesale platform on Thursday
One source who's been in the industry for 30 years told us that loan buybacks could affect, at worst, 10% ofsubprime production this year. If B&C lenders fund $600 billion, that would be $60 billion
In case you missed it: HSBC increased its loan loss reserve on its subprime business to $10.6 billion,a 20% gain from an estimate it gave in December. What's so strange is that I don't recall the December number everbeing publicized. I must've missed it. HSBC also is dropping its stated-income product and will cut itsbroker network. (Its purchase of Household Finance back in 2003 is not looking so good, is it? Expect headsto roll.) For the full story see Monday's NMN. Don't subscribe? Call (800) 221-1809. Also in Monday'sNMN a story by NMN's Bonnie Sinnock about two U.S. firms buying a Mexican mortgage brokeragefirm. Mexico's vacation market is booming
Subprime lender New Century Financial saw its stock dive by about 40% in two days after saying it wouldrestate earnings because of accounting gaffes tied to loan buybacks. New Century, as you might recall, got sockedaround pretty good in the B&C meltdown of 1998, only to survive and emerge stronger
And now for some good news: The former president of what was once the nation's largest residential lender isbuying mortgage firms. See Monday's NMN
Plenty of mortgage firms are for sale right now and many were sold over the past year. To track the action,check out the "M&A Database," a NMN product. For more information e-mail
We're told there could be an update this coming week on the sale of Ameriquest/Argent
Congratulations to Matt Smith of Providers Mortgage of Oceanside, Calif. Matt/Providers is thefirst mortgage brokerage firm to answer our annual survey. To participate send an e-mail to
By the way, NMN is now publishing for free its complete rankings on commercial mortgage lendersand servicers. Visit our website
Conspicuously absent at last week's House subcommittee hearing on Katrina-related housing problems: Housingand Urban Development secretary Alphonso Jackson...
More bad news for Michigan's mortgage and real estate market: Drug maker Pfizer is cutting 2,410 jobsin the state. It's a good thing the auto industry is picking up
WASHINGTON NEWS: Federal budget documents indicate that the FHA Mutual Mortgage Insurance Fundcould incur a loss next year -- the first in the program's 70-year history -- unless the Federal Housing Administrationincreases premiums or Congress approves a Bush administration FHA reform proposal. See Brian Collin's storyin NMN.
MORTGAGE PEOPLE: Michelle Minier has assumed full CEO duties at Financial Freedom Senior FundingCorp., a reverse mortgage lender owned by IndyMac. Lenders One, an alliance of independent mortgagebankers, has named Bill Federhofer director of training. John Bonfiglio, a group managing directorat Fitch Ratings, has been named head of U.S. structured finance at the rating agency. American BrokersConduit has hired H. Hilary Hamer as senior vice president of its Midwest region. Mr. Hamer joins ABCfrom Wells Fargo Home Mortgage.
SURVEY NOTICE: Loan officers take note -- NMN's annual survey of LOs is now ready.
DATA NEWS: NMN has 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
Only six more days until pitchers and catchers report to spring training.
