AN EDITORIAL:
"Unprecedented," is what one high placed Washington source called a letter sent by Sen. Charles Schumer last week to regulators at the FDIC and OTS concerning the financial viability of IndyMac Bancorp, a thrift that ranks number 11 (according to the Quarterly Data Report) among mortgage funders. In other words, it's not every day that a U.S. Senator potentially panics depositors at a large federally insured depository. What was Senator Schumer thinking? You got me. (It's no secret that IndyMac is having financial difficulties. Its stock is trading for less than $1.) Sen. Schumer and his staff regularly do not return telephone calls from National Mortgage News. That's okay, our feelings aren't hurt. The Senator apparently cares a great deal about wrongdoing in the mortgage industry but not so much about what's transpired on Wall Street in the past few years. Sen. Schumer's lack of interest in Wall Street's role in the mortgage crisis is touched on briefly in "Chain of Blame, How Wall Street Caused the Mortgage and Credit Crisis." (I'm one of two co-authors, as I've mentioned before. The book is now available.) Now, why would Sen. Schumer turn a blind eye to Wall Street? Here's a theory: Between 2003 and 2008 the senator received campaign donations of $1.37 million from securities and investment firms or what we call "Wall Street." (Figures courtesy of OpenSecrets.org). He has spent the last six months making Countrywide chairman CEO Angelo Mozilo (who will hold that title until July 1 when Bank of America officially takes over) a whipping boy for the mortgage crisis. (Mr. Mozilo's rise and fall also is a subject in 'Chain.' No excuses for him here either.) Now that Mr. Mozilo will no longer be involved in the industry, perhaps, the Senator needs a new target. His concern in regard to IndyMac might be better understood if the institution were headquartered in New York State. But it's not. Its HQ is in Southern California. As one analyst told us, "there's bigger and more troubled institutions to worry about than IndyMac." (And they happen to be located south of Canal Street down near the New York Stock Exchange. I think Sen. Schumer knows that neighborhood well.) Perhaps, this is the senator's way of getting back at the Golden State for stealing the Brooklyn Dodgers and New York Giants in the late 1950s. As one New Yorker Ricky Ricardo once quipped, "You have a lot splaining to do"
Should mortgage brokers and loan officers be fingerprinted and their information kept in a national registry? Some lawmakers in Washington are considering such language in several pending housing-related bills. Some states already require brokers to be fingerprinted, so maybe it's not such a big deal. (Perhaps, going forward, all mortgage traders on Wall Street should be fingerprinted.) As for the fingerprinting language, the American Civil Liberties Union is even against the idea
According to the Associated Press, Washington Mutual, the nation's largest S&L, spent $270,000 in the first quarter lobbying on banking, mortgage and regulatory issues, according to a recent disclosure form. The Seattle-based thrift lobbied Congress on regulation of federal thrifts, credit card practices, an overhaul of regulation for mortgage giants Fannie Mae/Freddie Mac, and foreclosure prevention legislation. The expenditures were not surprising, really. Last year it spent $980,000 on lobbying
It wasn't a great year for the thrift and banking industries in 2007 (thanks to the mortgage and housing crisis) but executive compensation at depositories rose by nearly 5%, according to a new report released by SNL Financial. "The data reveals that while total return for banks and thrifts in 2007 was -23.7% (as compared to +16.9% in 2006), the median change in total compensation for all bank and thrift CEOs increased 4.8% during the same period," said Will Retzer, a senior analyst for SNL Financial
According to figures compiled by the Quarterly Data Report, subprime late payments soared to 28.6% in the first quarter of 2008 which means $294 billion in A- to D loans are 30 days or more late. Meanwhile, according to Bloomberg, former Bear Stearns mortgage trader Jeff Verschleiser has landed on his feet. Mr. Verschleiser has accepted a position at Goldman Sachs. To order the QDR email:
WASHINGTON NEWS: Senate Banking Committee leaders are urging federal banking regulators to "wake up" and revamp their appraisal standards, instead of complaining about the changes Fannie Mae and Freddie Mac have agreed to implement under a settlement with New York Attorney General Andrew Cuomo. For the full update see Brian Collins' story on MortgageWire by visiting:
MORTGAGE PEOPLE: The Mortgage Bankers Association promoted Jamie Woodwell to vice president of commercial/multifamily research. If you need up-to-date stats on commercial lending and servicing order the new Mortgage Industry Directory or eMID. Email:
