Last week, we reported how loan brokers were getting blamed for the nation's current mortgage mess. I receiveda ton of e-mails, several with epithets aimed at consumer advocate Bruce Marks of Neighborhood AssistanceCorp. of America who before Congress likened brokers to a pest commonly found in several Jersey City apartmentsthat I rented in my youth. Let's just say many brokers were offended by Mr. Marks' comments. And, Mr. Marks, ifyou're thinking of attending any broker shows over the next few weeks, I wouldn't. Anyhow, this e-mail responsefrom “Lennie” shall serve as a rebuttal to Mr. Marks' comments: "In 14 years I never, nor anyone that hasworked for me, crossed the line of illegal activities to get a paycheck and when those crazy ass investors cameout with things like the stupid interest-only (loan) I refused to sell them and anyone that wanted one I told themno and if they went elsewhere to get it I'd say call me when you see what you got into.This type of program wasstupid and greedy created by investors not brokers." Thanks, Lennie. Now, I would like to ask readers this:if you have any enlightening stories concerning Wall Street account executives looking the other way, or caringmore about volume than loan quality, send them my way. I've heard some already, but I'm all ears. I will keep yourname confidential, if you want. My e-mail address is
When you have lemons, make lemonade. Countrywide Home Loans — whose subprime servicing portfolio hasa delinquency rate north of 20% — also has $188 million in foreclosed real estate on its books. (At the end ofDecember that figure was just $27 million.) Over the past month I've talked to a few now-job-seeking mortgage executiveswho are putting together business plans to invest in delinquent loans or start lending shops to fund the purchaseof REO
Up, up and away: the Mortgage Insurance Companies of America said its members reported insurance defaultsof 58,441 in August, a 30% jump from the same month last year. That sounds like a bad number but look on the brightside: the days of 80-10-10 loan structures are over and that's good news for the MI industry
THIS JUST IN: NetBank, a $2.5 billion thrift that two years ago ranked among the top 50 residentiallenders in the U.S., has gone bust. The Office of Thrift Supervision took them over on Friday. The FederalDeposit Insurance Corp. was named receiver
Has the payment-option ARM gotten a bad rap? I'll leave that up to the industry but we know this: accordingto freshly published figures from the Alternative Products Quarterly Data Report, originations of payment-optionARMs fell 43% in the second quarter. The nation's top 20 originators of POAs saw their fundings fall by 33%. Butdon't expect this loan to go away anytime soon. Subprime POAs are toast, yes, but prime POAs likely will survive.To order the AP-QDR or to see a sample e-mail
This comes from an industry veteran who recently found an old e-mail from a friend and passed it on. It concernsthe failure of New Century Financial Corp., once the nation's top subprime wholesaler. When New Centuryfiled for bankruptcy protection the friend quipped: "All the Lamborghini dealers in Orange County flew theirflags at half-mast"
Is it a bullish sign for the mortgage industry that bottom-fisher Wilbur Ross Jr. is buying theservicing platform of the bankrupt American Home Mortgage? It should be, but Mr. Ross, we are told,has not officially won the bid and another round of offerings is in the making. Stay tuned
And now for some good news, well sort of. According to Friedman Billings Ramsey, 89.9% of subprime loansfunded in 2007 were still current as of June 30
At the Washington state brokers show last week, our correspondent reports: "All the booths (64) ultimatelywere filled by the time the show opened. But some brokers there told me exhibitor booths were 50% less in numberthan last year. The general mood there among the attendee-brokers was that things were definitely slowing downin the Northwest, even as studies indicate it's the only “hot” region in the country these days"
In late August, Bank of America came to the rescue of Countrywide, buying 15% and putting to rest(more or less) questions about its liquidity. This past week Bear Stearns — which has played a leading rolein the nation's subprime crisis — said it might sell 20% of itself. And guess who might be a buyer? Answer: Bankof America
Need an updated list of dead mortgage firms? Visit
WASHINGTON NEWS: NMN's Brian Collins reports that Democrats on the House FinancialServices Committee have drafted a predatory-lending bill that would sweep more loans into the "high-cost"category and make it very difficult for lenders to provide traditional subprime loans to borrowers facing "lifeevents" such as bankruptcy, job loss, or foreclosure. See the National Mortgage News websitefor more information.
MORTGAGE PEOPLE: Cantor Fitzgerald has named Shawn Matthews and Scott Moore seniormanaging directors and co-heads of its mortgage-backed securities sales and trading business.
IMPORTANT UPCOMING MORTGAGE SHOWS: On Nov. 30, SourceMedia will host its "MortgageOutlook 2008 Conference" in New York. Mortgage Outlook 2008 will discuss such issues as: "TheGSEs — 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 BankersAssociation is hosting its annual convention in Boston come October.
DATA NOTICE: Need rankings and profiles on the top residential lenders and servicers? Need hard statisticson these firms and who their CEOs, servicing and production chiefs are? Need commercial mortgage banking informationas well? NMN has just published the brand new eMortgage Industry Directory, an online book that tracksthe nation's top 400 lenders, 300 servicers, top 85 subprime and much, much more. The e-book also provides a specialanalysis on America's subprime crisis. To order e-mail
