THIS JUST IN: A major regional bank scuttled a $2.1 billion auction of mostly delinquent mortgages in December, leaving a number of bidders steamed (and that's putting it nicely). "I'd like to punch them in the nose," one "scratch and dent" investor told us. Late Friday, a representative from the bank said it really had no intention of selling the mortgages in the first place but just wanted to see what bids they might get. For the full story see the Monday edition of National Mortgage News. Don't subscribe? Call 800-221-1809. A subscription includes access to all the premium news on NMN's website, too...
We keep hearing stories from loan brokers about "adder" fees attached to Fannie Mae and Freddie Mac loans. One broker working on a mortgage for a two-family loan in the New York area said the adder fees on a rate sheet sent out Friday total roughly 300 basis points. He adds, "Remember, these are before the broker/banker adds anything for profit." He notes that most brokers add 1.25 to 2 points for profit...
And now, the main event: Bank of America. A few months back Ken Lewis was seen on the CBS show "60 Minutes" looking like the guy who just won the lottery. He seemed jazzed that half of Americans (one way or the other) banked with BoA, and that it would soon own what was once the nation's premier retail stock brokerage firm: Merrill Lynch, where the stock brokers have Ivy League degrees and wear red suspenders. At the time of the interview BoA was still digesting Countrywide Home Loans, which leads me to wonder: didn't Lewis have any idea about all the crap loans Countrywide had on its books? I'm talking about subprime, alt-A, payment-option ARMs and second liens. CFC had billions worth of this junk. Merrill, meanwhile, had billions more in subprime CDOs and $42 billion in subprime servicing rights on its books through its ownership of Home Loan Services of Pittsburgh. Merrill at one point owned First Franklin, Bill Dallas' old A-/B shop. It also owned part of Ownit Mortgage, another Bill Dallas creation. And Merrill owned Wilshire Credit of Oregon, yet another subprime "specialty servicer." All of this was in the pages of NMN and "Chain of Blame." (Sorry, I can't help the plug.) Now, BoA is getting even more TARP money. The bank got $15 billion in the fall, Merrill $10 billion, which means the government has invested $45 billion in BoA/CFC/Merrill. Now for the big question: $350 billion has been spent with another $350 billion left. If the second $350 billion doesn't stabilize the U.S. economy, what do we do next? Or at what point do we pull the plug on this whole experiment in financial socialism, call it a day and start selling apples on the corner? OK, I'm ranting now. But maybe because more U.S. companies just announced thousands more in jobs cuts Friday and at least half of those "let-go" workers have mortgages. Bottom line: it doesn't feel like things are getting much better. After spending $350 billion it should. But I don't want to be all negative. Mortgage rates continue to fall to new lows and refis are accelerating. And legendary bottomfisher Wilbur Ross is buying two banks in Florida. So let's be positive for a moment. Maybe we're reaching bottom. Maybe...
As for Mr. Ross, his American Home Mortgage Servicing business in Irving, Texas, has $41 billion in residential receivables to protect against refis. The portfolio includes mostly alt-A loans that once belonged to American Home Mortgage REIT in Long Island. There's talk making the rounds that American Home is in discussions with a vendor to outsource the targeted refinancing on its servicing portfolio...
It seems that the refinancing boom is beginning to overwhelm certain lenders. A spot check of the nation's top 10 residential mortgage firms by National Mortgage News found that some shops are putting potential applicants on hold for 10 to 15 minutes. In one instance, a potential applicant at CitiMortgage waited 15 minutes before being sent to voicemail with a promise of a call back...
By now you know that JPMorgan Chase is exiting the wholesale channel. Its reasoning (in part) is that delinquencies on mortgages brought to it by brokers are higher than in other channels. However, a spokeswoman for JPM would offer no numbers whatsoever on what those delinquency rates are. For the full story see Monday's NMN...
The reverse mortgage market seems to be picking up steam. According to exclusive survey figures compiled by National Mortgage News, some lenders are seeing a handsome increase in their reverse applications and fundings. In the fourth quarter, for example, Bank of America originated $1.18 billion in reverses, compared to $426 million in 4Q 2007. The figures will appear in the upcoming issue of the Quarterly Data Report, a NMN statistical publication. To order the QDR e-mail
Michael Dell's MSN Capital LP is one of seven "private equity" partners that banded together to buy IndyMac FSB from the Federal Deposit Insurance Corp. One investor told us Mr. Dell (who has a computer company named after him) is also an investor in Peak Financial, which has an office in Sherman Oaks, Calif. Not much is known about Peak except that it's involved in foreclosures. MSN Capital is not (of course) publicly traded but Dell Computer is. Its shares are trading near their 52-week low. Then again, most public companies are trading near their lows...
IN CASE YOU MISSED IT: Impac Mortgage of California (remember them, the former alt-A giant?) has filed paperwork to effect a reverse stock split of its outstanding common shares. Its shares are now traded on the "pink sheets" and believe or not, but Joe Tomkinson and Bill Ashmore are still there. Go figure...
WASHINGTON NEWS: Fannie Mae and Freddie Mac have been directed by their regulator to record - beginning in 2010 - identification numbers for loan officers, appraisers and others involved in originating mortgages they purchase in the secondary market. The names of these origination professionals will not be recorded and instead each will be given a number under a new national registry for mortgage professionals. For the full story see Brian Collins' story on MortgageWire:
MORTGAGE PEOPLE: Jefferies & Co. named Daniel Markaity and Christopher Bury managing directors in charge of its fixed-income business. Jonathan L. Kempner, who was president and chief executive of the Mortgage Bankers Association until the end of last year, has accepted a position as an independent director of Behringer Harvard, a multifamily REIT. Before joining MBA in 2001, he spent 14 years as president of the National Multi Housing Council.
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. Order the MID and receive a free Quarterly Data Report, too. 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
