What a week in Washington! In Capitol Hill testimony on Thursday loan brokers were portrayed as the Great Satan of the subprime crisis. This is what housing advocate Bruce Marks had to say: "Brokers are like cockroaches. Once you step on them, there are five more." He told a House committee that a "massive" amount of Americans will lose their homes in the coming year, adding, "Economic terrorism is what's going on this country." He also bashed Countrywide's lending record. On Wednesday, on the Senate side, Martin Eakes of the Self-Help Credit Union suggested that yield-spread premiums should be prohibited which is more, or less, like saying loan brokers should be put out of business. (The way things are looking brokers might be out of business anyway.) All of this raises an interesting question: How did loan brokers come into being? As I recall -- and I'm going by memory -- the broker movement started in the wake of the S&L crisis 20 years ago. When hundreds of thrifts went bust, laid-off loan officers became "freelancers" for Anaheim Savings, Guardian Savings, Countrywide and others. If you have any recollections about the evolution of brokers drop me an e-mail at Paul.Muolo@SourceMedia.com...
Late last week, London-based HSBC Holdings pulled the plug on its subprime wholesale division, Decision One. HSBC bought DO and its parent, Household Finance, four years ago, paying $14 billion for the company. (That's right, $14 billion.) The question HSBC's Sir John Bond needs to ask is this: What was I thinking? The way things are looking the Household deal could turn out to be the worst acquisition in banking history...
A personal note to Citigroup and CitiMortgage: You've bought the naming rights to "new" Shea Stadium, which is currently under construction. It will be called CitiField. Is there anything you can do to prevent the Mets slide? Get Willie Randolph to use some middle relievers who actually know how to get batters out? Thanks...
In case you missed it: Lehman Brothers disclosed Tuesday that the restructuring of its global mortgage operations -- including the closure of BNC Mortgage -- will cost it $44 million...
Meanwhile, Countrywide chairman and CEO Angelo Mozilo said he would like to double the number of branches his company operates in the next four to six months, saying he continues to be bullish about CFC's future. More branches would, in theory, bring in more deposits. Deposits would allow CFC to rely less on Wall Street and banks for its financing needs...
Treasury secretary Henry Paulson is now open to the idea of raising the loan limit cap for Fannie and Freddie. That means the two -- if allowed -- could buy loans above $417,000. Now the question becomes how high can they go? Paulson, also is open to suspending, temporarily, mortgage insurance requirements for the GSEs. I wonder what FM Watch thinks about all this?...
Something to think about: The median home price in Orange County in August was $642,250. About 60% of homebuyers in there took out jumbo loans during the first six months of this year, according to DataQuick...
A recently laid-off LO at First Horizon wrote to us saying the following: "Over 100,000 of us will have to reinvent ourselves this year. I have spoken to people that made consistently $200K to $500K per year that are going to bartending school this weekend. I am getting my Class A CDL to drive trucks. Most of us can’t do the startup period that it takes to sell securities or any thing else for that matter. Even the auto sales business can’t absorb the people displaced by the mortgage industry"...
WASHINGTON NEWS: The Office of Thrift Supervision has suggested to Congress that it is time to impose some level of federal supervision over independent mortgage banks and that the OTS has the "expertise" to do it. "The OTS has extensive expertise in the oversight and supervision of mortgage banking operations that I believe would benefit the currently unregulated mortgage banking market," OTS director John Reich told the Exchequer Club in Washington. See Brian Collins' story in Monday's National Mortgage News. Don't subscribe? Call (800) 221-1809.
IMPORTANT UPCOMING MORTGAGE SHOWS: On Nov. 30, SourceMedia will host its "Mortgage Outlook 2008 Conference" in New York. Mortgage Outlook 2008 will discuss such issues as "The GSEs -- What Does the Future Hold?" It will also focus on opportunities in the "scratch and dent" market. For more information telephone (800) 803-3424 or (212) 803-6093. And don't forget the Mortgage Bankers Association is hosting its annual convention in Boston come October. Bono of U2 is speaking, among others. (Maybe he'll address declining home values in Ireland.)
MORTGAGE PEOPLE: Peter Muriungi has been named senior vice president at EMC Mortgage, Lewisville, Texas. He will head the company's financial analytics and structured transactions, and business information teams. EMC is owned by Bear Stearns. Freddie Mac said Jeffrey M. Peek has resigned from its board. In his resignation letter, Mr. Peek, CEO of CIT Group Inc., expressed his desire to avoid the appearance of a "conflict of interest" in connection with Freddie's purchase of MBS from CIT.
DATA NOTICE: Need rankings and profiles on the top residential lenders and servicers? Need hard statistics on these firms and who their CEOs, servicing and production chiefs are? Need commercial mortgage banking information as well? NMN has just published the brand-new Electronic Mortgage 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 subprime crisis. To order, e-mail
