If it weren't for the dire financial straits of the big three automakers, would the nation be on its way to a financial recovery? Christmas is less than a week away and why not look for a glimmer of hope in the dark tunnel of our nation's economy? This past week the Federal Reserve cut short-term rates to just 25 basis points, which means money is dirt cheap right now. Heck, it's so cheap that even the subprime industry might stage a comeback. Actually, I'm kidding on that last point. The subprime industry of the past few years is gone and never coming back. The only hope for truly credit impaired Americans rests with hard-money lenders, which offer mortgages at sky right rates - and only if there's equity in a home. But back to the recovery. Yes, we're seeing mortgage applications spike. And why shouldn't we? Some lenders are offering 5% loans. NAMB chief Marc Savitt who runs a brokerage in West Virginia told us applications are up threefold at his shop compared to November. Consumers are opting out of ARMs (no surprise there) but also are switching from 30-year loans to 15s. But the key to any true recovery will be the job market. I've said it before and I'll say it again: we need real job creation before seeing a boost in home buying activity. It boils down to this: people without jobs, and consumers who fear layoffs will NOT buy a home no matter how low rates go. Stay tuned...
National Mortgage News broke the news Friday that NAMB is suing HUD over the new RESPA rule (which doesn't become operative until January 2010). An early copy of the lawsuit provided to our newspaper had only one defendant on it: HUD secretary Steve Preston. Meanwhile, sources tell NMN's Brian Collins that the National Association of Home Builders is contemplating suing HUD over RESPA as well. But NAHB has a different beef with the proposed "final" RESPA rule and it has nothing to do with yield-spread premiums...
If GMAC Financial Services becomes a bank holding company and taps some of the TARP money, it may load up its balance sheet with auto loans and receivables. Currently, GMAC's bank has mostly mortgage-related assets on its balance sheet...
JPMorgan Chase is offering buyout and exit packages to certain managers at what used to be known as Washington Mutual. One senior officer told us he's weighing his options. "The package they're offering isn't bad," he said...
Let's talk about the mortgage/credit crisis and books. I know I promised not to promote "Chain of Blame, How Wall Street Caused the Mortgage and Credit Crisis" in this column again, and I won't. (No Web links are provided here) But Bloomberg named "Chain" one of the 10 best business books of 2008. I would just like to say thanks to all readers who sent it kind words about the book. Some of you provided additional stories about the crisis and asked me to write a sequel. I'm not sure about a sequel, but Wiley & Co., my publisher, has just released an addendum to "Chain" called "The $700 Billion Bailout, What It Means for You." Visit
Last week, I asked readers for their comments on the future of loan brokers. One of the more succinct replies came from Mike White from Harbor Mortgage of Pennsylvania. He writes: "It is true that the number of brokers has been greatly reduced with this latest market shake up. It is also my understanding that this is one of the favorable reasons banks like mortgage brokers. We are contract originators thus when the market goes up and down our numbers do so more dramatically. There are many positive things happening in the world of mortgage brokering which will greatly improve our reputation both in and out of the industry: We have the advent of the National Licensing System, every broker will now have their own individual license which means a lot more continuing education and a lot better fraud control"...
About 20% of mortgages originated in the third quarter were sourced through loan brokers via the wholesale channel, an all-time low, according to figures compiled by the Quarterly Data Report. If you want the QDR, order now. Prices are set to increase in early January. Mention this column and receive $25 off your order. Send an e-mail to
Meanwhile, I'm in part of next week. If I don't get to write one more column this year I would just like to wish all readers a happy holiday season and the hope of a real recovery in 2009. I may be back before the New Year.
DATA NOTICE: The Mortgage Industry Directory is still available as well as the online version of the book, the eMID. If you need rankings on the top 400 lenders and servicers, loan brokers and much more, this could be your product. The MID/eMID also provides executive names and telephone numbers, mailing addresses, delinquency info - and news updates (the eMID only). Buy the book and receive a free Quarterly Data Report. For more information e-mail
