THIS JUST IN: Deutsche Bank on Tuesday trimmed staff at its alt-A/conventional mortgage affiliate.For the full story visit
Earlier this year, when Merrill Lynch forked over $1.3 billion to buy subprime lender First FranklinFinancial Corp., and some of its affiliates, a handful of executives were dancing in the hallways at NationalCity in Cleveland. NatCity owned FFFC and, indeed, it would seem that they sold the subprime shop at the topof the market (and before the nonprime liquidity crisis reared its ugly head). But let's forget about FFFC fora moment. Does anyone see the irony of Merrill Lynch — known for selling stocks to America's wealthy — trying tomake a buck by lending to credit impaired Americans? Let's not forget that Merrill was a major (and I do mean major)warehouse financier of non-banks plying their trade in subprime, including Ownit Mortgage, Mortgage LendersNetwork and ResMAE, among others. What do all these lenders have in common? They all filed for bankruptcyprotection. Some in the industry even speculated that Merrill was engaged in a plan to reduce the number of subprimelenders so that FFFC would have less competition, a thought that only a conspiracy theorist would hatch. One subprimeexecutive who sold loans to Merrill told me that Merrill "was one of the most aggressive buyers of loans.They paid more than anyone and they did less due diligence." He blamed Merrill's woes on a top trader there,whose identity I'll get to in a future column as I continue to research the roots of this crisis. If you have anyspecific information about how Merrill ran its mortgage desk and why it thought it could thrive in subprime dropme an e-mail at
Countrywide Financial Corp. has hired PR firm Burston-Marsteller to help it counter negative publicityabout the company (of which there's been a lot). Of course, PR firms can't change facts and the fact is this: themortgage market isn't doing so good right now — and that's a nice way of putting it. (I wonder if Burston could'vestopped that “bankruptcy” comment made by Merrill analyst Ken Bruce in August? I don't think so.) Meanwhile,as part of its new PR strategy, according to a recent report in The Wall Street Journal,CFC is giving its employees wristbands that say, "Protect Our House." The first employee who mails meone gets a free subscription to our online edition. (Is this a take-off on Steven Colbert's “Wrist Strong”campaign? Nice call Burston.) If you have any additional information about this PR campaign, drop me an e-mail.My e-mail is above. My snail-mail address is 1325 G St. NW Suite 910/Washington, DC/20005
George Ostendorf is back. The former Hanover Capital managing director has launched a new firmto invest in distressed and illiquid mortgages. If 20% of subprime loans go bust in the next year, that's a $200billion market. (Subprime figures courtesy of the Quarterly Data Report.) Housed in the Illinois suburbs,American Mortgage Capital Group LLC is now open for business
Meanwhile, the secondary market for delinquent second liens isn't getting any better these days -- unless you'rea buyer. Traders tell us that seconds that were part of 80/20 loan structures are selling for 10 to 15 cents onthe dollar. Unsecured seconds are fetching just one to two cents on the dollar. "Debt collection agenciesare the ones bidding on this stuff," said one investor
The new Home Mortgage Disclosure Act database is now available from the data division of NationalMortgage News. Want production details on the 8,783 mortgage bankers that were in business in 2006? E-mail
Multifamily lenders, take note: with potential homebuyers (presumably) waiting for the smoke to clear in thehousing market, they are renting apartments or staying in their rentals longer which means the multifamily marketis looking up. According to Reis Inc., a New York consulting firm, the nation's apartment vacancy rate fell0.2% in the third quarter and rents increased 1.4%
Almost one-third (31%) of seniors are carrying $100,000 or more of mortgage debt, according to a new surveyof consumers between the ages of 62-75. The study was conducted by Financial Freedom, which says it is thenation's largest reverse mortgage lender. On a somewhat related note, in a few weeks NMN will begin surveyingreverse mortgage lenders. If you would like to provide us with your volumes, drop an e-mail to me at
WASHINGTON NEWS: The Department of Housing and Urban Development says some non-FHA-approvedmortgage brokers are charging "exorbitant" fees on FHA loans, according to reporter Brian Collins. "Weare seeing exorbitant fees," HUD officer Mark Ross told a Mortgage Bankers Association conference,adding that HUD officials are reviewing the matter. Mr. Ross also reported that some FHA direct-endorsement lendersare soliciting non-approved broker business with misleading advertisements implying that the broker can take theapplication or close the loan. "That is not allowed," he said.
MORTGAGE PEOPLE: David W. Berson, longtime chief economist at Fannie Mae, has been namedchief economist and strategist of The PMI Group Inc., a mortgage insurance company. J.E. Robert Cos.has named Michael Pralle as president and chief operating officer. He will be responsible for driving thestrategic growth for JER.
Need an updated list of dead mortgage firms? Visit
IMPORTANT UPCOMING MORTGAGE SHOWS: On Nov. 30 SourceMedia will host its Mortgage Outlook2008 Conference in New York. Mortgage Outlook 2008 will discuss such issues as: "The GSEs — WhatDoes the Future Hold?" It will also focus on opportunities in the "scratch and dent" market. Formore information telephone (800) 803-3424 or (212) 803-6093. And don't forget the Mortgage Bankers Associationis hosting its annual convention in Boston next weekend.
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
