Mortgage bankers and brokers that specialize in FHA (or want to) start your engines. Late this past week the House passed landmark legislation that provides $300 billion in FHA mortgages to troubled (presumed) subprime borrowers who are ready to go kaput on their notes. According to the Quarterly Data Report, there is roughly $1 trillion in outstanding subprime loans in the U.S. The top servicer is Countrywide, which is now the ward of Bank of America. To get a complete listing of all subprime servicers order the QDR by e-mailing Deartra.Todd@SourceMedia.com. For complete coverage of the new bill (which the Senate is expected to approve this weekend) see the Monday edition of National Mortgage News. Don't subscribe? Call (800)221-1809...
Need a list of wholesalers that have recently departed the sector? Visit
Has the mortgage industry hit bottom yet? Who knows, really, but according to Mortgage Bankers Association chairman Kieran Quinn, the worst might be over for home lenders. Mr. Quinn told NMN that MBA will post positive earnings for the fiscal year ending Sept. 30 but noted, "We'll break even to have a small loss for the year that begins in the fall." MBA president Jonathan Kempner resigned last week (effective year-end). The trade group is mentioned in the new book, "Chain of Blame, How Wall Street Caused the Mortgage and Credit Crisis." MBA's biggest fiasco of the past few years: allowing the National Home Equity Mortgage Association to merge into it. NHEMA is also mentioned in the book...
Meanwhile, thanks for all the comments and thoughts on "Chain of Blame" which I co-authored with Mathew Padilla of The Orange County Register. The book has received great reviews from The Wall Street Journal, Bloomberg and CNBC. Some of you asked me to post more excerpts, so here's one. It comes from chapter five, "Angelo Rising, The Son of Bronx Butcher Makes Good." This excerpt deals with the sales culture (to some degree) at the lender:From 1993 to 2000 Jonas Roth served as Countrywide's national sales manager. The traders working under him could earn three to four "sticks a year." One stick was equal to $1 million. It didn't take long before word got out to Countrywide's senior managers elsewhere in the company that whole-loan traders working in its capital markets group under Roth were raking in the dough, thanks to their commissions. "There was some resentment on the part of the managing directors," said Roth. "Angelo was hearing a lot of complaints about it."
Roth was summoned to Mozilo's Pasadena office along with Sambol. "We're going to put a cap on what the salesmen can make," Mozilo told him.
"You can't do that," Roth implored him. "You can't tap out the salesman." Mozilo stood up and walked over to the window. He signaled for Roth to come over. "You see that street down there?" Mozilo asked. "That ain't Wall Street, that's Lake Street. We do things our way."
Roth said the cap was placed on the whole-loan traders, but not for long. "They found another way to pay by putting the money in a separate account for them." Read the book's introduction at
A few people who are in the book that might surprise you: Michael Blum of Merrill Lynch, Deutsche Bank's Michael Commaroto, FDIC's Sheila Bair, JPMorgan's Jamie Dimon, Ameriquest PR man Chris Orlando and Maria Bartiromo (in relation to Countrywide). Next week, more names from the index...
In September, MBA will release its tax filing for the last fiscal year. Its last tax filing shows two interesting donations the trade group made: a $5,000 grant to the Peking University Law School in Beijing and $3,500 to The American Ireland Fund. You can draw your own conclusions but these donations obviously show that MBA executives are fond of hanging out in Irish pubs and eating Chinese food. Just kidding, Jonathan. Good luck in all future endeavors. You were one of the more open trade group officials I've dealt with in 20 years of financial service reporting...
File this under "Oops." Countrywide (now part of BoA) slashed the interest rate on a Fullerton, Calif., couple's mortgage to 1% for five years, allowing them to avoid foreclosure. According to The Orange County Register, the rate reduction was a mistake. The newspaper reports that Countrywide wanted to help John and Grayce Coffman - but not with a 1% interest rate for five years. It meant to offer 1% for the first year, with the rate increasing one percentage point for each of the next four years. It later decided to honor the error...
WASHINGTON NEWS: The FHA section of the massive housing bill (our lead item) is causing heartburn for lenders because they will have to abandon a newly implemented risk-based pricing structure. The Department of Housing and Urban Development mandated implementation of the RBP structure by July 14, but the housing bill imposes a 12-month moratorium on risk-based pricing starting October 1. For the full story, see Brian Collins' story in Monday's National Mortgage News. Any comments about this FHA change e-mail Brian at
Standard & Poor's has added Marix Servicing LLC to its "Select Servicer List"...
KEY EARNINGS REPORT TO WATCH: Freddie Mac will release its second-quarter 2008 financial results before the New York Stock Exchange market open on Wednesday, Aug. 6, 2008.
MORTGAGE PEOPLE: Residential Capital LLC has named Joseph A. Pensabene executive vice president and chief servicing officer. ResCap is part of GMAC Financial Services.
DATA NOTICE: With the mortgage industry in the throes of a historical correction you need up-to-date data on which firms are left standing. You need hard numbers on their servicing and production volumes, including executive names and telephone numbers. All of this contained in the brand new Mortgage Industry Directory and the Web version of the production, the eMID. The book and ebook provide 1Q 2008 information plus full-year 2007 stats. For more information e-mail
