Over the past 12 months, roughly 200 mortgage banking firms and/or channel platforms have closed, accordingto estimates made by National Mortgage News. But what about loan brokerage firms? According to currentresearch being done by NMN's staff in Washington, on a sample of firms that were active earlier this year,the closure rate is about 15%. If you apply that to the 53,000 firms that were open in late 2006, that's an uglynumber...
Meanwhile, Bill Dallas, the former CEO of Ownit Mortgage and First Franklin (at differenttimes) had some interesting things to say about the future of wholesaling. He spoke last week at a LoanToolboxshow in Las Vegas. See Monday's NMN. Don't subscribe? Call: (800) 221-1809...
There was plenty of big news this past week but the shocker had to be the $370 million loss posted by MGIC-- and the even bigger news that it does not expect to earn any money (at all) in 2008. MGIC is part owner (alongwith Radian) in C-BASS, which in turn owns Litton Loan Servicing. A few weeks ago, TheWall Street Journal reported -- as though it were a done deal -- that Goldman Sachs was buyingLitton. But so far there has been no announcement. Stay tuned...
At the Mortgage Bankers Association annual in Boston this past week there was a lot of talk about whenthe market might hit bottom and turn. But here's something to keep in mind: the subprime market is in the tank,the jumbo market sketchy. "Affordability products" like payment-option ARMs and 40-year loans are nearnonexistent (at least when it comes to table funding). This is what I think: Realtors and loan brokers need towake up to the fact that these products, which allowed people to buy homes that were overpriced, are gone and thatmeans only one thing: home prices need to come down to levels people can actually afford. So, if you're a homebuyerand you want to own a house in a once-hot area like SoCal, I suggest you offer the homebuilder a lot less thanwhat they're asking. What do you have to lose? By law, a Realtor has to present all offers to the seller. It'snot like there's 10 offers on that house, not anymore. Those days are over. By the way, the magic number on a mortgageis -- and will be -- $417,000. If you can't figure out why you shouldn't be reading this column...
He must be a Mets fan: Departing MBA chief John Robbins said this past week that 2007 was a "terrificyear," in every sense of the word. I kid you not. In all fairness, he also said it was an "intense"and "frightening" time as well. His remarks were first reported on NMN's daily Web feed, MortgageWire,also known as National Mortgage News Online...
I would like to thank my source at Countrywide Financial for mailing me a "Protect our House"wristband. The anonymous source also mailed me a copy of a note from CFC COO Drew Gissinger. (See a photoof the wristband -- modeled by NMN's own Sharon Hutcherson -- and Mr. Gissinger's note by visiting:
Meanwhile, in Orange County employment officials are seeking two grants totaling $3.5 million to beef up servicesfor laid-off mortgage workers, according to a report in the Orange County Register. Andrew Munoz,executive director of the OC's Workforce Investment Board, said he thinks the county can make a good case for stateaid since it was a center for the subprime mortgage industry. According to new Mortgage Industry Directory,eight of the nation's top 10 subprime lenders (ranked by 2006 volume) were based in California, though not necessarilyin the OC...
MEDIA COVERAGE OF MORTGAGE MESS: This past week a headline on a Reuters story read, "Bonolures depleted broker ranks to mortgage fete." The story was about the annual MBA convention in Boston. It'stoo bad Reuters doesn't know the difference between mortgage bankers and brokers.
WASHINGTON NEWS: A consortium of banks are putting together a $100 billion "superfund" to investin structured investment vehicles and collateralized debt obligations, which in turn invested in subprime-relatedassets (mortgage bonds). The consortium -- believe it or not -- is being put together by the Treasury Department,as in Henry Paulson, the former head of Goldman Sachs.
DATA NOTICE No. 1: The new Home Mortgage Disclosure Act database is now available from the datadivision of National Mortgage News. Want production details on the 8,783 mortgage bankers that were in businessin 2006? E-mail
DATA NOTICE No. 2: Need rankings and profiles on the top residential lenders and servicers? Need hardstatistics on these firms and who their CEOs, servicing and production chiefs are? Need commercial mortgage bankinginformation as well? NMN has just published the brand-new eMortgage Industry Directory, anonline book that tracks the nation's top 400 lenders, 300 servicers, top 85 subprime and much, much more. The e-bookalso provides a special analysis on America's subprime crisis. To order, e-mail
