I've come up with a plan to stabilize the U.S. mortgage market and it starts with jobs. It works like this: every company that is currently profitable cannot lay off any workers. Then they tell their employees the good news. These employees, feeling secure in the cash flow generated by their paychecks, then go out and spend money, or at the very least, keep paying their mortgages. This would be a voluntary system (obviously) since this isn't a socialist nation, though you can argue that given the takeovers of Fannie Mae, Freddie Mac, AIG and the government's investment in many banks that we're headed down Mao's road. My jobs idea can apply to unprofitable companies, too, but if a firm is losing money it likely will not hold onto employees for very long if it's bleeding red ink. I know my jobs idea isn't the most brilliant, but after attending the Treasury Department's press conference on Monday - the one where secretary Henry Paulson told the nation "never mind" about the government buying "troubled" mortgage assets - I'm starting to wonder if anyone in Washington has a clear idea of how to solve the nation's financial woes. Keep in mind this one little fact: the crisis started with the 30-year mortgage, the subprime species. Enter Wall Street...
THIS JUST IN: By the time you read this column Henry Paulson could be gone as Treasury secretary. At least that's some of the blather we're starting to hear from the pundits on television, including CNBC. (Remember the good old days, when TV reporters interviewed real news subjects and not other reporters?) Then again, certain members of Congress are hopping mad that Paulson first pitched the $700 billion bailout as a plan to buy bad mortgages and now he has no intention of doing so. But he has the cash. He told the nation (Congress in particular) that something had to be done fast because the commercial paper market had frozen up and stocks were swooning. Well, stocks are still swooning. As for the commercial paper market we hear reports that lending has commenced again. But would the slight thaw in CP have come about anyway, even if there were no TARP? One of these days someone is going to write a book about the government bailout...
Mr. Paulson told the press that "we have dozens of applications" from banks that want the government to buy preferred stock in their institutions...
While we're on the subject of books, I'm taking a break this week from plugging my own prize-winning tome. (OK, so I didn't win any prizes yet but my kids like it.) But seriously, business books that are selling include manuals that motivate Realtors to sell homes and books that tell people how they can make money on foreclosures. I've been wondering about the foreclosure market of late. My question is this: If you know of any lenders that are doing a brisk business in foreclosure financing drop me a line at
In a week or so National Mortgage News will release its 3Q version of the Quarterly Data Report, complete with rankings on the nation's top 100 lenders and servicers. Meanwhile, if you're looking for first-half volumes the Midyear Data Report is now available. To order send an e-mail to
On Monday National Mortgage News will publish a story on the "scratch and dent" loan market, which is now seeing some activity thanks to Treasury scrapping its plan to buy mortgages. If you don't subscribe to NMN or our website call (800) 221-1809...
Also, we wonder what Stan Kurland's PennyMac firm is doing these days. One source said it has bought 500 loans to date. That's not a lot given the huge amount of inventory that's out there...
WASHINGTON NEWS: Congress needs to pass legislation that "unlocks" securitized trusts so servicers sell distressed mortgages to the Treasury Department for restructuring, according to a former Treasury official in the Clinton administration. Michael Barr told a House panel that the Real Estate Mortgage Investment Conduit statute could be amended so that mortgage-backed securities investors don't face a tax penalty when loans are sold to Treasury, which is administering the Troubled Asset Relief Program. (For the full story see Brian Collins' story on Monday's MortgageWire.)
The Florida condominium market is in the tank, no doubt. Not only are mortgage insurance firms not writing policies in selected ZIP codes, but we're starting to hear reports that property and casualty firms are hiking the rates they charge for hazard insurance, making monthly payments for consumers more expensive. "Grandma and grandpa can't afford that second home any more," said one investor who's buying troubled loans in the state...
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
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
