On Friday morning the Federal Reserve added $19 billion in liquidity to the market, then another $16billion and for the heck of it threw in $3 billion at midafternoon. According to one report, the Fed was acceptingmortgage-backed securities as collateral. Meanwhile, Fannie made its portfolio cap request public, tellingthe world it wants a 10% increase so it can help solve the nonprime liquidity crisis. In case you're wondering,10% translates into $72 billion. Why does Fannie need an increase? Because some of its top seller/servicers (itwon't say which firms) are asking it for some breathing room, as in can you take these loans off our hands? Ifyou want to find out who the top sellers are to Fannie, order National Mortgage News' HMDA Database.For more info e-mail
Here's something to think about: Fannie Mae and Freddie Mac cannot help ailing alt-A borrowers in California.Why? According to one executive who plays in that market, homes cost too much there, and many troubled mortgagesare over the GSE loan limit of $417,000. He notes that 80/20 combos won't help either since the secondary marketfor seconds (on those structures) has evaporated as well...
Have the folks at Citigroup and JPMorgan Chase been reading our website about Countrywideand Washington Mutual publicly expressing their anxiety about their liquidity? Hard to say, but one thingis clear: if both Countrywide and WaMu pull back from the production market this could be a major opportunity forthese two to gain some serious market share...
Need an accurate list of recently deceased mortgage firms? Visit the NMN website at
The most surreal event we witnessed this past week was CNBC stock picker Jim Cramer bouncing aroundthe set a week ago Friday, lambasting the Federal Reserve for not cutting interest rates, a move that wouldaid his hedge fund friends on Wall Street. Mr. Cramer later made clarifying statements on Comedy Central's"Colbert Report" that he wasn't looking to help his rich friends on the Street but that he wasconcerned about the little guy. (In the past, Cramer has been a major bull on Countrywide.) Cramer believes that7 million consumers are going to lose their homes in the next year. However, from what I saw on one of his shows,Mr. Cramer was advising underwater borrowers to walk away from their homes...
The liquidity crisis has become so big (as in, international big) that President Bush is now being pepperedwith questions about the subprime mess. However, the president made it perfectly clear that there will be no governmentbailout of subprime lenders. Instead, he is telling troubled mortgagors to refinance their loans through the FHA...
If you haven't visited NMN's Grapevine website (
Is anyone in the secondary market buying alt-A loans? It would appear the answer is no -- so says Impac'sCEO. In an interview with the Orange County Register, chairman/CEO Joseph Tomkinson said,"There is no bid for alt-A product. There should be a bid, but there is no bid. People are taking a breatherto see where the market is going"...
And now for some good news. "This is the best time to be in the mortgage business." Those words comefrom Chris George, president of CMG Mortgage of San Ramon, Calif., a non-depository wholesale/retaillender that never ventured into subprime lending. According to Mr. George, CMG is doing quite well with its "HomeOwnership Accelerator" loan, a product that helps the consumer pay off his/her mortgage early. In July, CMGfunded $327 million in loans, one-third of them HOAs...
It's called the "material adverse change" clause and it's standard language in most purchase contractsfor mortgage banking firms. The meltdown in the subprime and alt-A markets has -- obviously -- changed the valueof mortgage firms that are slated to be sold in the next few months. In other words, firms that agreed to sella few months ago are no longer worth the negotiated price. But what are they now worth? Good question. Stay tuned...
One joke making the rounds: that the Mortgage Bankers Association has hired The Dead (formerlyknown as the Grateful Dead) to play “Club MBA” at its upcoming annual convention. If you don't get the joke,well, you don't get the joke...
According to the latest Experian-Gallup personal credit index survey, 55% of consumers believe the federalgovernment should pass legislation helping subprime borrowers keep their homes and avoid foreclosure...
WASHINGTON NEWS: She must be running for president: To crack down on abusive lending, Sen. HillaryRodham Clinton, D-N.Y., wants upfront disclosures of a mortgage broker's compensation and a ban on prepaymentpenalties, along with a requirement that all subprime mortgages have escrow accounts. As you can imagine, thisidea went over with the mortgage industry -- brokers in particular -- like a Led Zeppelin.
MORTGAGE PEOPLE: Freddie Mac named Mike Perlman executive vice president, operations and technology.Mr. Perlman comes to Freddie from Morgan Stanley. Fidelity National Financial, the nation's largesttitle insurance company, named Andrea Debnam its multicultural marketing manager for the Pacific NorthwestRegion.
DATA NOTICE: If you're trying to figure out where the mortgage market is headed and what the businesswill look like for the rest of the year you're in luck. NMN has just published the brand new MortgageIndustry Directory, which ranks the nation's top 400 lenders, 300 servicers, top 85 subprime and much,much more. The book also provides a special analysis on America's subprime crisis. To order, e-mail
