How do we know when we've hit a bottom in any market -- mortgage or otherwise? The experts tell us that a bottom is usually reached when we have total capitulation. Of course, the word "total" could be open to interpretation...
The loan brokerage community got slapped upside the head last week with the news that Washington Mutual was telling brokers to take a hike. (WaMu, according to the Quarterly Data Report, is the nation's third largest wholesaler.) If Countrywide decides to exit the wholesale arena -- which is expected once the Bank of America deal is completed in the fall -- then the industry may have reached the capitulation nadir. Then again, predicting the bottom is impossible. Maybe it happened when National City exited wholesale two months ago. Any thoughts? Drop me an e-mail at
Also, the best loan broker/wholesale website out there is BrokerUniverse. Visit by going to
One of the Baldwin boys (Rick) who used to work at LIME Financial is now running a subprime/hard-money shop called Excelsior Fund. "We're doing bridge loans and equity loans," Mr. Baldwin told us recently. He prefers not to use the "hard money" moniker...
If you would like a ranking of the nation's top wholesalers in 4Q send an e-mail to
Just posted to the NMN website, a ranking of the nation's dead servicing companies. You cannot find this data elsewhere. Visit
Every day we hear new tales about funds being formed to bottom-fish in the delinquent (scratch and dent) loan market, but one S&D executive tells us that "not a lot of big trades" have come off lately. A West Coast investor tells us that he's been investing in mostly small loan pools -- many of which are being sold by Wall Street firms such as Bear Stearns. Meanwhile, we continue to hear reports that Greenwich Capital -- which is building a new headquarters in Connecticut -- has been margin calling certain mortgage companies that play in the S&D market. Greenwich once again did not return our phone calls. If you have any insights about the matter drop us a line...
As we all know the U.S. mortgage market has been hammered. But is the U.K. next? This comes from a reporter friend of mine over in London: "It's getting pretty bad here. Big banks like HSBC are still keen for business (It is a balance sheet lender so a happy chappy in the current market), but the top U.K. lenders like Halifax and Nationwide are keeping a tight grip on criteria and pulling rates on a daily basis. Both are now penalizing any borrower that fails to stump up a 25% deposit. GE is pretty much the sole occupant of the U.K. subprime market. I don't think anyone expects that to change any time soon"...
Who says the nonprime securitization market is dead? From the NMN website this past week: IndyMac Bank has announced the securitization of $335 million of prime jumbo, alternative-A credit hybrid adjustable-rate mortgages that it traded in a private-label deal slated to settle on April 15...
Remember Bill Black, the S&L regulator who went to war with Charlie Keating and helped the government close his corrupt thrift? Bill also was in on the "Keating Five" meeting with the five U.S. senators, including presidential hopeful John McCain. Here's a link to a recent K5 "anniversary" piece that Bill wrote:
Who says the jumbo subprime NINA market is dead? On the way into work Tuesday I saw an ad in the business section of The Washington Post for a company advertising "loans to $1 million" for no-income, no-asset verification borrowers. To boot, they'll lend on investor properties. The lender is called Flexloan. Its e-mail address is
In case you're wondering why the Federal Deposit Insurance Corp. is so worried about the banks it regulates, it all boils down to this: commercial real estate development loans and something called "interest reserves." Banks that have been lending heavily on condo development projects have interest payment reserves built into the deal. This means the banks are paying themselves interest each month (from the original loan), which makes the deal look good -- even as the development's prospects for success are fading quickly. But now that many condo projects are in deep trouble or being scuttled it's only a matter of time before those interest reserves run out. If you have a commercial real estate background the FDIC is hiring in its Dallas office...
Last week I asked readers to send in their reports on market conditions in their geographic areas. Here's a sampling -- edited by me for clarity and grammar -- of what was sent in:
(*) New Mexico: "New Mexico, like the rest of the country, is enjoying the wonderful opportunity to compete with a large amount of lenders for a much smaller pie, try and figure out what underwriters will ask for beyond the kitchen sink, and more than anything mortgage brokers are in a scramble to find a correspondent relationship so they can originate FHA loans." -- Name withheld.
(*) Florida: "I have some buyers from December who are still waiting for the banks to decide on short selling. In the meantime, the terms including price add-ons have gotten worse, especially on My Community Mortgage programs. We haven't hit bottom yet but it's close." -- Lee Phelps (Open Door Mortgage, Brandon, Fla.)
(*) California: "Our market (North San Francisco Bay Area) is starting to stabilize, at least at the lower levels. But the lenders are all over the place with service. A few months ago we had two piggybacks with Chase. We locked both and ordered docs. For two weeks we could get no status on the loans. We found out the Chase rep was gone and there's no new rep. Guidelines are changing so fast they should be written in disappearing ink." -- Bill Matz, Masters Touch Mortgage, California.
WASHINGTON NEWS: House Financial Services Committee Chairman Barney Frank, D-Mass., is warning mortgage servicers that they could face very restrictive regulation next year if they don't cooperate in modifying loans for distressed borrowers. The chairman said he is picking up anecdotal evidence that servicers, not investors, are the reason so few mortgages are being restructured. See Brian Collins' story in Monday's NMN. Don't subscribe? Call: (800) 221-1809.
LOAN OFFICER SURVEY NOTICE: National Mortgage News has launched its new 2008 Loan Officer Survey. To participate (it's free), just visit
MUST-ATTEND MORTGAGE MEETINGS: SourceMedia will hold its second annual Mortgage Servicing Conference at the Westin Park Hotel in Dallas on April 17 and 18. The keynote speaker is Paul Bennett, chief economist for the New York Stock Exchange. For more information visit
DATA NOTICE: The Mortgage Industry Directory and the online version of the book are still available. (Mention this notice and receive a free Quarterly Data Report.) 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
