It's no secret that origination volumes are suffering - but none are suffering more than in the wholesale and correspondent channels. According to exclusive survey figures compiled by National Mortgage News and its affiliate the Quarterly Data Report, retail production accounted for 51% of all loans funded in the first quarter, the highest reading ever recorded by these publications. From January to the end of March, mortgage bankers originated $525 billion in home mortgages, $267 billion through the retail channel with correspondent and wholesale accounting for $153 billion (29%) and $105 billion (20%), respectively. In the first quarter of 2004, for example, retail accounted for 42% of all loan production with wholesale capturing 28% and correspondent 30%. For the full story see Monday's NMN or order the QDR. For more info on the QDR e-mail
Even though the wholesale sector is hurting, not all firms are throwing their platforms overboard. Industry veteran Peter J. Levasseur sees an opportunity in the wreckage. Mr. Levasseur, former president of AMRESCO Residential Mortgage, is now running Fortes Financial of Dallas. Last week Fortes inked a deal to take control of five regional wholesale offices formerly belonging to National City Mortgage Corp., a subsidiary of the Cleveland bank. The wholesale offices are located in San Diego, Dallas, Chicago, Frederick, Md., and Atlanta. For the full story see the Monday edition of NMN...
On July 1, Countrywide Financial Corp. became the official property of Bank of America. CFC workers received their BoA pins and welcome letters and are awaiting further instructions from the Charlotte-based bank. Meanwhile, CFC co-founder Angelo Mozilo (now retired) is a central figure in a new book on the mortgage crisis called "Chain of Blame, How Wall Street Created the Mortgage and Housing Crisis." I co-authored the book along with Mathew Padilla of The Orange County Register. One of these days I'll tell you more about the book but not this week. However, I did talk about the book, the crisis and the industry at large with National Public Radio's Terry Gross. The interview will run Tuesday on NPR's show "Fresh Air"...
According to the QDR, the combined mortgage operations of BoA and CFC will service $2.013 trillion in residential loans, $1.484 trillion from CFC, $529 billion from BoA. But what will come of CFC's $106 billion subprime servicing portfolio? BoA has said little about its plans in this regard. It has two options here: let the receivables run-off or sell them to a third party. Then again, with a subprime delinquency rate of 33% on the CFC portfolio, a sale doesn't seem likely. Stay tuned...
CORRECTION: Bank of America isn't an alt-A giant after all. The company told the research staff of National Mortgage News that it funded $20.15 billion in alt-A loans in the first quarter of 2008. Our head researcher called BoA to double-check the figure and they said it was correct. Of course, after NMN published its final 1Q rankings of alt-A funders in its June 23 edition, BoA called to say the number is incorrect. It funded just $142 million worth of alt-A loans in 1Q not $20.15 billion. Perhaps, the Countrywide acquisition kept it so busy that it forgot to triple-check what it was reporting...
City officials in Worcester, Mass., have asked state lawmakers to give them immediate local authority to halt subprime foreclosures for six months, limit evictions and force a judicial review of foreclosures. State lawmakers are already considering a bill that would establish a 180-day moratorium throughout Massachusetts, but city officials say that conditions in New England's second largest city cannot wait. This story was first reported by The Worcester Telegram & Gazette.
A HISTORY LESSON: The peak years for subprime lending were in 2005 and 2006 when mortgage bankers of all stripes originated $1.46 trillion in A- to D loans. (Figures are courtesy of the QDR.) It was also in those years that many subprime ARMs funded included 2/28 and 3/27 notes, which means after two or three years the interest rate would increase. This summer is expected to be the peak of ARM resets, according to First American CoreLogic, a California-based research firm. Does this mean the housing/mortgage crisis should crest by the fall? Stay tuned. One thing is certain: According to the QDR, lenders funded just $4 billion in subprime mortgages in the first quarter of this year. That's quite a come-down from the go-go years...
MORTGAGE PEOPLE: Citigroup has named Sanjiv Das chief executive of CitiMortgage of O'Fallon, Mo. Mr. Sanjiv returns to Citi after holding positions at Morgan Stanley and Bank One.
BOOKS BY OTHER MORTGAGE EDITORS NMN editor Mark Fogarty has collected all his rock 'n' roll essays from brokeruniverse.com into a new book called "Went to See the Gypsy." Mark's been a big rock fan since the Beatles came ashore. The book is his reflections and memories of all the greatest rock bands - not to mention the ones he saw live at mortgage industry events. For info:
