THIS JUST IN: On Friday Colonial Bancgroup of Alabama closed near its 52-week low of 55 cents a share. What does this have to do with mortgage banking? Colonial is one of the few remaining warehouse providers to non-depositories. If Colonial finds itself in financial hot water, you can scratch yet another warehouse provider off the list. Non-bank mortgage originators that depend on warehouse money are praying that the bank will receive TARP funding and that liquidity will not be an issue. According to recent press reports, in late January Colonial divulged that it must raise $300 million in equity in order to receive a $550 million capital injection through the Treasury's Troubled Asset Relief Program. The bank is now the subject of lawsuits by shareholders who have seen the value of their holdings fall dramatically...
Meanwhile, National Association of Mortgage Brokers chief Marc Savitt is hoping for a meeting with the White House concerning the future of loan brokers who are being cut off at the knees by both wholesalers and mortgage insurance companies. All this is happening in the midst of a refi boom. The NAMB chief, as well as many brokers, believe there is a bank-led conspiracy to put them out of business, thus eliminating a competitor. This past week National Mortgage News broke a story that The PMI Group was banning broker-sourced loans from its coverage menu. It's the first MI to do so. To subscribe to NMN call: 800-221-1809...
Not only are brokers being tossed overboard by the MIs and wholesalers, but with so many net branch firms shutting down they've lost that source of funding as well. One investment banker told me this past week "it appears that brokers are goners" but he still thinks both very small operators or "mega" broker shops will survive - if the industry pulls out of its tailspin. "Or maybe the brokers will just turn into LOs and go work for a bank," he said...
THEN AGAIN: Not all residential wholesalers are exiting the business. Case in point is Franklin American Mortgage of Tennessee. Using loan brokers Franklin table funded $1.32 billion in the fourth quarter, a 19% gain from the same period a year earlier. A company official told National Mortgage News that over the past two years Franklin has hired 350 workers. "We're a very conservative lender," he said. "We stayed out of subprime"...
Speaking of tailspins, Treasury secretary Tim Geithner was probably scratching his head this past week when the stock market plunged on Tuesday after he released the "details" of his bank stabilization and foreclosure prevention plan. In case Mr. Geithner didn't notice there were no details in his plan - though he promised that in a few weeks the details would come. (Supposedly, President Obama will release some foreclosure prevention details on Wednesday.) There was one major problem though with Geithner's performance: the preceding week news was leaking out all over the place that a detailed plan was forthcoming. The market expected one, was betting on one, and got near zero. Nothing. Just a "sort of" outline. As one PR man told me: "When you call a press conference to say something you're supposed to actually say something." Good point...
We're in a refi boom, right? Applications are up and consumers are all dreaming of getting a 4.5% mortgage. (Dream is right.) But one lender tells me this: "Every day I see further deterioration in the ability to finance good borrowers. Remember most of our clients are over 690 FICO and higher net worth, both conforming and jumbo. We've seen a 10% to 30% drop in real estate values, coupled with about a 30% restriction in Fannie credit (down to 60% LTV with no hits). Anyone left is usually someone that missed the past seven years," he said...
The nation's top five residential servicers now control 66.94% of the housing receivables market, according to the upcoming issue of National Mortgage News' Quarterly Data Report. What does this tell us about the servicing market? That it's consolidating, for sure. But it also means the nation's top five servicers are all now "too big to fail." (All have received TARP money.) To order the QDR drop an e-mail to
WASHINGTON NEWS: The House passed its stimulus bill on Friday afternoon. Before the dust settled legislators raised the first-time homebuyer tax credit to $8,000 - a $500 increase from recent language. But keep in mind that the housing sector and Republicans were pushing for a $15,000 tax credit for all homebuyers, not just first timers. For the full story see Brian Collins' story on MortgageWire:
MORTGAGE PEOPLE: First Bank of Missouri has named Bill Kusman president of its mortgage division, which is based in Chesterfield. Bill, a 27-year veteran of the industry, joins the company from CitiMortgage where he was a senior vice president.
MUST ATTEND CONFERENCE: National Mortgage News/SourceMedia's third annual servicing conference. The show will be held April 6 and 7 at the Marriott Dallas/Fort Worth. Larry Litton of Litton Mortgage and many others are speaking. Topics include REO, loss mitigation and much more. For more information call 800-803-3424.
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
