THIS JUST IN: Friedman Billings Ramsey on Friday pulled the plug on its subprime mortgage division, First NLC Financial Services of Florida, a company managed by industry veteran Neal Henschel. One source noted that FBR's Rock Tonkel was on the scene to deliver the bad news. For the full story visit the premium content portion of National Mortgage News' website. Don't subscribe? Call: (800) 221-1809...
There is plenty we still don't know about Bank of America's proposed $4 billion purchase of Countrywide Financial Corp. First off, was Fannie Mae consulted on the deal? Fannie has recourse agreements on all the loans CFC sold to it over the years. That aside, this is what could happen over the next year as BoA tries to integrate Countrywide's mortgage operation into its own: (1) BoA likely will whittle down or close the wholesale network, throwing the future of many loan brokers into doubt. (2) There will be a power struggle -- as there always is -- as to who manages the business. Angelo Mozilo will retire and David Sambol may decide to walk as well. (3) Many other top executives who have worked for Mozilo (the 20-years-plus club) will weigh their options, deciding to eventually leave and either retire or entertain opportunities elsewhere. How do I know all this? I don't. But on Friday many tongues were wagging. Industry veterans who know CFC well -- including CFC employees -- were talking on background about what arguably is the most important merger in the annals of mortgage banking history. Countrywide was the king of wholesale lending. Some say CFC started the broker movement though that's not entirely true. CFC definitely helped put brokers on the map. Others wonder whether the sale will fall apart entirely or be renegotiated as BoA takes a magnifying glass to CFC's books. For now, neither institution is talking about the deal or disclosing much...
And if your head isn't spinning already from all the "bad" mortgage news, there are several key mortgage players posting earnings next week, chief among them: Merrill Lynch, Washington Mutual and Wells Fargo. Strap yourself in and order up some popcorn. It's going to be a humdinger of a week...
In late February, former Merrill Lynch mortgage chief Richard Pratt will hold his annual Midwinter Housing Conference in Utah. For many years this has been a must-attend for the industry's movers and shakers. The first panel is entitled (I am not making this up): "What the Hell Happened? (It wasn't my fault I just moved here.") One of the speakers is former Merrill client (not when Mr. Pratt was there) Bill Dallas, who managed such subprime shops as First Franklin (Merrill's problem now) and Ownit Mortgage (Merrill's problem of 2006)...
Meanwhile, some analysts say Merrill will take a $15 billion hit on CDOs and subprime bonds in 4Q. See the story on the NMN website...
I'm looking for stories about Russ and Becky Jedinak who used to own/manage Guardian Savings and Quality Mortgage. If you have any tales drop me an e-mail at P
Need a list of the nation's top alt-A servicers? Order the Alternative Products Quarterly Data Report. Send an e-mail to
The American Dialect Society this past week chose the word "subprime" (are you sitting down?) as its "word of the year." (Again, I don't make this stuff up.) I even saw the news on CNBC and CNN. "Subprime has been around with bankers for awhile, but now everyone is talking about subprime," said Wayne Glowka, a spokesman for the group. "It's affecting all kinds of people in all kinds of places." Do tell. The runner-ups to subprime? Answer: Facebook, green, Googleganer and waterboarding. The word `alt-A' came in a distant fifth! (Okay, I made that last part up)...
LOAN ABUSE STORY OF THE WEEK: "When you have a borrower who makes $35,000 a year who is able to purchase a $600,000 primary at 90% LTV -- with no income documentation -- there's a problem with the system as we know it. I turned down this customer. He went to the Realtor's 'mortgage buddy' and got his loan, at 9.75%. He later came back to me to ask if I could help and I, of course, could not as the value has gone down by about 20%. He has two small children and is now in foreclosure." -- MM (Have a loan abuse story? E-mail them to me at:
WASHINGTON NEWS: It's not on the table today, but the chief executive of Fannie Mae says policymakers should consider creating a single national regulatory agency to oversee the entire housing finance system. "I think we need a more unified approach to housing finance policies," Fannie Mae CEO Daniel Mudd told an American Enterprise Institute forum. That report comes from NMN's Brian Collins.
MORTGAGE PEOPLE: The Senate Committee on Banking, Housing and Urban Affairs has named Amy Friend chief counsel. Ms. Friend was formerly assistant chief counsel at the Office of the Comptroller of the Currency.
DATA NOTICE: The Mortgage Industry Directory and the online version of the book are still available. Besides listing detailed information on the top 400 lenders and 300 servicers in the U.S., the MID ranks the nation's top funders of commercial mortgages. There's also information on loan brokers. The book has valuable contact information on the top executives and department heads at each firm. For more information e-mail
