THIS JUST IN: Early Monday morning it appeared that New Century Financial Corp., the nation'ssecond largest subprime funder, was about to go down the drain -- the bankruptcy drain. In an SEC filing thenon-depository/REIT revealed that Morgan Stanley had pulled out of an agreement to provide $265 millionin (essential) financing and that several other Wall Street firms were declaring the non-depository in defaulton warehouse lines or repurchase agreements. Barclays informed New Century that it had pulled its rightto service loans. If New Century fails -- which seems likely -- it will be the largest subprime collapse in U.S.history. In trading Monday morning its stock had been halted. With its production financing drying up, the onlycash flow the company can generate will come from its $40 billion servicing portfolio. But if firms like Barclaysterminate servicing rights, its demise will be swift...
HSBC Holdings soon will begin unloading some of its on-balance-sheet subprime holdings. Scratch-and-dentinvestors tell us billions may come to auction. For complete details see the Monday edition of National MortgageNews. Don't subscribe? Call: (800) 221-1809. A sub to the newspaper includes free access to allthe premium content on our website...
Meanwhile, one veteran subprime executive told us he is moving into hard-money "equity lending," givingup on subprime for now. He said one secondary market buyer (a Wall Street firm) asked his shop to buy back a loanhe sold to them 18 months ago. The executive, requesting anonymity, said, "Right now there is no bid in themarket place" for subprime. He predicted that if conditions keep up only depositories will survive...
Several senior executives are still scratching their heads over the closing of California's Central PacificMortgage, a mostly “A” lender. Word is that one secondary investor forced unreasonable buybacks on the company...
How much will Fremont get for its subprime wholesale lending operation -- the one that's blown a holein its books and forced the FDIC to put a gun to its head? Interesting question. Here's the answer: notmuch, we're told. Why? Answer: Because it is no longer funding loans and its employees are starting to leave...
One reader sent us an article that appeared on National Public Radio recently, regarding military slang.One phrase caught his attention because it applies to the subprime meltdown. The phrase: "Embrace the suck."Translation: The situation is bad, but deal with it...
The Federal Reserve has been carefully watching the B&C meltdown for months. We know because thebank has been buying our Quarterly Data Report, which ranks the nation's top prime and subprime lendersand servicers plus much more. For information, e-mail
And now for some good B&C news. Not all firms are getting creamed.
Delta Financial Corp. of New York last week reported net income of $8 million for the fourth quarterand $29.8 million for the year. In the 1998 subprime crisis DFC almost disappeared...
Some more good news: Foreclosure filings declined in February for the second straight month, indicating thatthe worst may be over in "America's home foreclosure crisis," according to Foreclosures.com, aFair Oaks, Calif.-based investment advisory firm...
The Federal Bureau of Investigation's estimate that mortgage fraud costs the lending business $1.2 billiona year is off the mark by more than $3 billion, according to a fraud analyst speaking at the Midwinter Conferencein Park City, Utah. That report comes from NMN's Lew Sichelman, who is also a nationally syndicatedcolumnist. Lew reported that Countrywide's Angelo Mozilo had this to say about the current industrycrisis: "You never know who's swimming naked until the tide goes out"...
A no show at the Park City conference: Ameriquest/Argent executive Adam Bass...
WASHINGTON NEWS: Baker Hostetler LLP has named former Ohio congressman Michael G. Oxleyof counsel. The former Financial Services Committee chairman, also a former FBI agent, will be based inits Washington office, effective March 12. He will serve existing firm clients as well as develop his own publicpolicy practice in the areas of corporate counseling, financial services and capital markets. He is, of course,a co-author of the landmark Sarbanes-Oxley Act of 2002.
MORTGAGE PEOPLE: Myron Filarski has been named president of KeyBank Mortgage, a divisionof KeyBank NA's community bank. Mr. Filarski was most recently senior vice president of mortgage lendingwith Fifth Third Bank. Lenders First Choice, a settlement services and title firm, has named ScottThomsen national sales director. Presidential hopeful Rudy Giuliani has sold the investment bankingarm of his consultancy to Australian bank Macquarie. Macquarie, at one time, was an active residential lenderin the U.S. Former New York Sen. Alfonse "Senator Pot Hole" D’Amato, once a member of the BankingCommittee, has signed a lobbying deal with the Poker Players Alliance. See -- good things do happen to nicepeople. First Metropolitan Mortgage, a division of Empire Equity Group, named Melissa Criderdeputy chief compliance officer.
SURVEY NOTICE #1: Loan brokers take note. NMN is conducting its annual survey of mortgage brokeragefirms. To participate send an e-mail to
SURVEY NOTICE #2: Loan officers take note -- NMN's annual survey of LOs is now ready.
DATA NEWS: According to new 4Q edition of the Quarterly Data Report, mortgage bankers funded $795billion in loans during the quarter. Subprime production fell to $143 billion from $176 billion in 3Q. The QDRoffers complete rankings on the top 100 mortgage funders and servicers with breakouts on loan channels, subprimeand much more. For info on the product e-mail
