ELECTION WEEKEND EDITORAL: Every four years, the late, great Stan Strachan, the founder and editor-in-chief of National Mortgage News (formerly known as National Thrift News), would endorse a presidential candidate. Stan was a Democrat (back when Democrats were really liberal) and he consistently backed people like Walter Mondale and Michael Dukakis. (Stan was also bad when it came to picking prizefighters.) It seemed that a solid majority of our readers were Republicans (back when the GOP was more liberal) and the nasty letters and subscription cancellations rolled in. I'm not in the business of endorsing candidates. In the modern age of a zillion media and Internet outlets is it likely I could change anyone's mind? But as you go to the polls on Tuesday keep in mind that the current crisis affecting our business (and the nation at large) is about money. The sad thing about this election is that neither candidate seems to have talked about two of my favorite issues: Social Security and eliminating our huge budget deficits. Barack Obama has been portrayed by his GOP enemies as a socialist who wants to "redistribute the wealth." The irony is obvious: Under President Bush, Fannie Mae and Freddie Mac have been "socialized" and the government now owns huge chunks in nine of our largest banks with more to come. We, the people, also own American International Group, a $1 trillion insurance company loaded down with $70 billion in credit default swap exposure. How does it feel? Something has gone terribly wrong and you can rest assured that no matter who wins on Tuesday the mortgage and banking industries are headed into a new era, one where heavy regulation is the norm. You cannot have laissez-faire capitalism when you're dealing with the public's money. Buying a home is the largest investment made by most Americans. It needs to be regulated - and (sadly) heavily. Why? Because there's too many crooks and fast-buck artists out there. The days of lax regulation are over. Get used to it. Comments? Drop an e-mail to
Five Years Ago This Month: A new Republican policy paper on Fannie Mae and Freddie Mac says that Congress should consider privatizing the two mortgage giants as a way to send a message to financial markets that neither is explicitly backed by the full faith and credit of the U.S. government. The policy paper, which comes out of the Senate, says, "Taxpayers can no longer be expected to underwrite" the two's "speculative financial activities." In a section of the paper headlined "Are Increased Transparency and Regulation Sufficient?" the policy paper frets about the "implicit" government guarantee on Fannie/Freddie securities. Senate Republicans want to find a way to "attenuate" the perception of the implicit government guarantee. The policy paper, written by economic analyst Jason Thomas, says privatization is one way to accomplish this.
The business media has not given much ink to all the losses being borne by the nation's credit unions in the current crisis. Our sister publication, Credit Union Journal, has covered the blood bath extensively. According to CUJ Washington editor Edward Roberts, there are roughly 7,700 CUs open and operating today. Five years ago there were 10,000...
When the mortgage market began to crater in earnest last summer lenders shut off the HELOC spigot that homeowners had been using to live (shall we say) "large." Of course, not all consumers were using their HELOCs irresponsibly. But for those who liked to live beyond their means anecdotal evidence suggests they turned to their credit cards. Today, card delinquencies are on the rise and the carnage is starting to filter down to card issuers. Just how bad is it? Today, in a stark acknowledgment of the tough times ahead in the credit card industry, American Express said it would slash 7,000 jobs (about 10% of its worldwide work force) in an effort to save money. Question: Just how many of those 7,000 workers have a mortgage? A HELOC? Stay tuned...
Remember that recent legal settlement whereby Countrywide would modify about 400,000 loans to settle predatory lending charges with California, Illinois and nine other states? It looked like a done deal, but a law firm representing investors in mortgage-backed securities made from those loans is challenging the settlement saying the cost - an estimated $8.4 billion - will be borne by investors in the MBS trusts. The New York litigation firm of Grais & Ellsworth is holding a briefing in New York on Nov. 11 to inform MBS investors of their rights. Countrywide is now the property (and problem) of Bank of America...
UPCOMING EARNINGS TO WATCH: Triad Guaranty, the nation's smallest mortgage insurer, releases third-quarter earnings on Nov. 10. Triad is writing very little in the way of new policies these days, according to the Quarterly Data Report.
WASHINGTON NEWS: The White House is reviewing several foreclosure prevention programs but is not ready to endorse a new loan modification program that the Treasury Department and FDIC are working on. "We're doing an analysis right now on several different ideas" to help more homeowners, said the president's press secretary Dana Perino. For the full story visit
DATA NOTICE #1: Need to know the loan volumes on more than 7,000 mortgage lenders including what they sold to Fannie Mae and Freddie Mac? An Excel workbook containing the most frequently requested rankings based on the 2007 Home Mortgage Disclosure Act data is now available. If you are interested in having this data please send an e-mail to
MUST ATTEND CONFERENCES: Don't become another fraud statistic. National Mortgage News, Mortgage Technology and American Banker invite you to attend the 3rd Annual Mortgage Fraud Conference on Nov. 13 and 14 in Las Vegas. For more info call Tiffany Patrick at (212) 803-8699.
DATA NOTICE #2: 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 is contained in the brand-new Mortgage Industry Directory and the Web version of the production, the eMID. The book and e-book provide 2Q 2008 information plus full-year 2007 stats. For more information e-mail
