Yet another major HELOC lender is clamping down on what type of seconds it will fund and where. It's name begins with a "C" and it's not Countrywide. We already know about CFC. For the full story see Monday's issue of National Mortgage News...
A loan broker we know notes that Wells Fargo has been "centralizing" wholesale since November with Texas loans (where he is based) going to the bank's hub office in Minnesota and Illinois. He says that service is "super slow." With Washington Mutual's decision to exit wholesale there is a tangible fear that if a few more large table funders exit the business it will be curtains for the brokerage community. Of course, that also means others might ramp up -- but at this point it's all academic. According to the new edition of the Quarterly Data Report, these wholesalers showed strong growth in 4Q: Flagstar, Amtrust Bank (formerly Ohio Savings), U.S. Bank Home and ING Bank. For the complete ranking in the QDR drop an e-mail to
Remember last summer when Bush Treasury secretary Henry Paulson told the world that America's subprime crisis would not spill over to the overall U.S. economy and overseas markets? The former Goldman Sachs chief was 110% wrong. Not only is the mortgage market hurting but commercial and student loan companies are pulling back, too. Late last week Bank of America said it plans to stop issuing "private" student loans -- or loans not backed by the government. The reason: turmoil in the bond market has made the debt hard to sell to investors. BoA is in the process of buying Countrywide. It's assumed that the sale will close by Sept. 31...
In last week's column I made it sound like Countrywide would exit the wholesale arena once it's bought by BoA. I have no specific information that confirms that fact though wholesalers and brokers have been predicting such a thing since early February. Also, Wholesale Access chief David Olson, an authority on the broker market, believes there's a strong possibility that BoA could pull the plug on CFC's wholesale division. Bottomline: no one knows for sure...
NMN's Broker Universe and Grapevine websites are Internet forums for brokers, wholesalers and vendors, among other industry professionals. Here's a link to a discussion about a recently laid off broker/manager who was terminated a day after two checks came in on loans he closed. His former employer has not paid him and he wonders how to get his money:
In its recent filing with the Securities and Exchange Commission, Bear Stearns provides details on the "run" on its bank by institutional customers during the week of March 10. Think of the Christmas time movie "It's a Wonderful Life" and you get the picture except that these customers didn't include Mr. Martini -- they were huge corporate clients who wanted to yank their money out before the House of Bear fell. In the filing, Bear says $20 billion in margin accounts walked out the door and another $22 billion in business where customers were engaged in shorting stocks. And that's not all: $9 billion in asset management money left, too. It's unclear how fast the money walked away but the comparison was to Nov. 30...
According to Annual Data Report (the annualized version of the Quarterly Data Report), Countrywide Home Loans was the top GNMA issuer in 2007, besting Wells Fargo Home Mortgage $20.69 billion to $15.96 billion. To order the ADR send an e-mail to
When Wachovia released first-quarter earnings on Tuesday the press release was a bit light on details. The bank took a $2 billion writedown because of mortgage and other problems. It was all of nine pages -- compared to, say, 32 pages from Wells Fargo. One interesting tidbit in the release: its home-equity lending business, once a key part of its consumer operations, fell 41% in the quarter "reflecting implementation of tightened credit standards." The bank also noted that 95% of its HELOCs come through its branch network, suggesting, perhaps, that its use of loan brokers is on the wane...
Industry veteran Richard Wilkes (ex-MacAndrews and Forbes, IMX, and other companies) recently shared with us his thoughts about what the future holds for mortgage lenders. Here's a few of his points: Legacy mortgage lenders will suffer a severe disadvantage for several years because they will be fighting lawsuits, consumer advocates and Congress for years; existing firms will be "hamstrung" with overhead, capital expenditures, systems, mindsets and managers that will make it difficult if not impossible for them to morph into "the mortgage company of tomorrow"; the "new" mortgage bank will emphasize high-touch customer experiences, full transparency of pricing, product selection and credit and underwriting guidelines; and nimble, privately held companies will seize this opportunity and will steal market share from the legacy lenders...
CORRECTION: In a recent column I said that Rick Baldwin of Excelsior Management Group used to work at LIME Financial. He did not. Rick's new company is a "hard money" lender.
eMAILS/MISSIVES (edited first by me):
(*)"State and federal governments bear a huge responsibility in this whole mortgage mess due to the complete lack of any meaningful regulation or enforce of the most basic lending regulations. As a staunch Reaganite I hate thinking of more government or bigger government, but in this case a little bit of regulation would have eliminated the pretenders, strengthened the good brokers, protected the consumer and preserved the housing industry as a whole." -- Randy Wiltshire
(*)"We all know that Bank of America's goal for a long time has been to eliminate the brokers and the competition. They can then keep all the YSP and future yield for themselves." -- Rex Whaley.
(*)Historically, the mortgage broker has produced the largest percentage of residential loans. With the exit of several of the major wholesale companies and more to follow, the broker community is in trouble. However, this is not the end but the beginning for responsible brokers. It is just a matter of time before the broker community realizes that we must organize our own employee owned mortgage banking company." -- Luther Reed.
WASHINGTON NEWS: The Comptroller of the Currency says he is uncomfortable with the way New York attorney general Andrew Cuomo is trying to impose an appraisal standard on all institutions through a settlement agreement with Fannie Mae and Freddie Mac. "To have a situation where a one-off agreement with a single state would have a national policy impact raises questions as to whether that is an appropriate way to make these kinds of policies," comptroller John Dugan said. The supervisor of national banks is planning to submit a comment letter on the settlement agreement by April 30.
LOAN OFFICER SURVEY NOTICE: National Mortgage News has launched its new 2008 Loan Officer Survey. To participate (it's free), just 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
