THIS JUST IN: Shabi Asghar, who founded subprime wholesaler Encore Credit Corp., has leftBear Stearns Residential Mortgage. In early 2007, Bear bought the money-losing Encore. Bear, as you mightrecall, had some loan buyback "disputes" with Encore. As the story goes, the two parties could not agreeon the damage. Instead of closing Encore down (Bear was warehousing them) Encore handed over the keys to the shop(and $7 million, maybe more). Mr. Asghar stayed on, that is, until last month...
The most fascinating story of the past week? Answer: Oil hitting $100 a barrel. What does this have to do withmortgages? A few things. First off, folks heat their homes with oil (and gas). As energy costs rise that meanshomeowners (and prospective buyers) will have to factor in the increase to their monthly budgets. Also, if gasprices keep shooting up it's possible that homes located near mass transit centers (subways, metros, BART) mightincrease in value because why fuel up when you can take the train? And finally, it takes trucks (and gas) to haulbuilding supplies. If gas prices increase that means the cost of a home increases. Of course, home prices are decliningall over (except Manhattan) and builders have no pricing power...
STATS YOU CAN RELY ON: Thanks to consolidation in the residential servicing business, the nation's topfive firms control 55% of all housing receivables in the U.S, or $5 trillion out of a total pie of $9.1 trillion,according to the Quarterly Data Report. About $1 trillion of the $9.1 trillion is subprime related. Roughly,21% of all subprime loans are in delinquency here, which means there are a whole lot of "collections"and "curing" to be done on $210 billion. For the full data picture order the Quarterly Data Report. Tosubscribe, e-mail
Meanwhile, late next week National Mortgage News will send out its fourth-quarter production and servicingsurvey. If you would like to participate send an e-mail to Ms. Todd at the above...
Finally some good news: Even though the mortgage business is in the tank — especially the nonprime sector —Freddie Mac believes lenders will produce close to $2.3 trillion in new loans this year, the most optimisticforecast made to date. For the full story see the Monday edition of NMN. Don't subscribe? Call: (800)221-1809. A sub gives you free access to the premium content on the NMN website...
Merrill Lynch-owned First Franklin Financial Corp. is continuing to change the way it pays itsaccount executives. One AE there told us that Merrill recently instituted new payment plans. "If you bringin one loan you get a flat fee of $3,000. The second loan you get $3,000 as well but beyond that you get 55 basispoints"...
QUESTION OF THE WEEK: Were regulators at the Federal Reserve, FDIC, OTS, (fill inthe blank) asleep at the wheel during the subprime crisis? Should the states have been more pro-active or did thelegislatures take donations from New Century, Ameriquest (and so on) and do their bidding? Send ane-mail to
DATA NOTICE: The Mortgage Industry Directory and the online version of the book are stillavailable. Besides listing detailed information on the top 400 lenders and 300 servicers in the U.S., the MIDranks the nation's top funders of commercial mortgages. There's also information on loan brokers. The book hasvaluable contact information on the top executives and department heads at each firm. For more information e-mail
