Loan brokers, it was nice knowing you. Maybe. The Federal Reserve Board may place restrictions on yield-spread premiums because it's too difficult to explain to consumers how they are used to compensate mortgage brokers. The Fed's director of consumer affairs Sandra Braunstein told a House panel this past week that YSPs are a very complex concept and the Fed's attempt at YSP disclosures has not worked well under consumer testing. (For the full scoop see Brian Collins' story in the Monday edition of National Mortgage News). Don't subscribe? Call 800-221-1809...
Meanwhile, if any more major warehouse lenders leave the sector it could be curtains for the nation's remaining non-bank lenders. This past week NMN's website broke stories about National City and Guaranty Bank exiting the warehouse arena. Over the past few months some lenders have been e-mailing me with their "conspiracy" theories regarding the nation's largest banks purposely dumping brokers and warehouse as part of a plot to gain market share. (In case you're wondering, Bank of America, however, is staying in the warehouse niche.) Recently the Mortgage Bankers Association took 13 of its members around Washington to visit officials from the Treasury, Federal Reserve, Government National Mortgage Association and Federal Housing Finance Agency. The topic: the warehouse lending crisis and its impact on consumers and non-banks. MBA chief John Courson said he thinks that regulators understand the dire nature of the warehouse lending crisis but immediate help may not be on the horizon. MBA hopes that regulators will cut the capital risk weighting on warehouse loans. Stay tuned...
And if all this isn't depressing enough for non-depositories, CNBC's chief stock picker Jim Cramer has an important message for all warehouse lenders and their non-bank customers: "drop dead." That's right, folks. A few minutes after Comedy Central's Jon Stewart put Cramer in his place Thursday night, he could be seen on his own show "Mad Money." Cramer - who one NMN staffer thinks resembles Vladimir Lenin - answered a question from a viewer who asked about warehouse lines. Cramer's response (paraphrased by me) boiled down to this: Cramer thinks warehouse is a bad line of business and that banks should get out that business ASAP. Cramer believes mortgage providers should originate loans and then hold them on their balance sheets. I kid you not. In case you missed the controversy of the past two weeks, Comedy Central's Mr. Stewart lambasted CNBC for its infotainment style of business journalism, and criticized some of Mr. Cramer's past stock picks, including Bear Stearns, which he touted heavily two months before Bear went bust. The stock was then in the $60 a share range. Cramer was also a past bull on Countrywide Financial Corp., whose CEO and founder was sometimes a guest on the channel - usually being interviewed by Maria Bartiromo. Based on Mr. Cramer's record, the best stock trading strategy may be to short stocks that he touts and go long on one's he's shorting. I wonder what Lenin would do?...
It's survey time again. If you're a retail loan officer or broker, National Mortgage News wants your production volumes for 2008. The results will be used for rankings in NMN and Origination News and will result in feature stories on certain producers. To fill out a survey visit
Believe it or not there are still about 20 subprime servicing firms left in the U.S. These companies are the remnants of what's left of a once-thriving A- to D market. Their mission in life is to perform all the monthly paperwork on the roughly $800 billion in outstanding subprime loans, 35% of which are delinquent. To see the full ranking read the Quarterly Data Report. To order the QDR send an e-mail to
In case you missed it: JPMorgan chairman and chief executive Jamie Dimon said not shutting Chase's wholesale channel sooner was the worst mistake of his career. The National Association of Mortgage Brokers, as expected, wasn't happy...
Bank of America's mortgage chief Barbara Desoer says she spends at least two hours a week listening to loan modification-related telephone calls that come in through the lender's workout unit. "I've heard grown men who are crying on the phone," she told NMN in an interview Thursday. She said on some days the phone traffic to the loan mod unit is so heavy that callers are issued a reservation number and are asked to call back...
Rep. Spencer Bachus of Alabama, the ranking minority member of the Financial Services Committee, sent a letter to Securities and Exchange Commission chairman Mary Schapiro urging her to adopt what he calls "common-sense accounting changes so companies can value assets by their real worth, not an artificially depressed value." The issue at hand: mark-to-market accounting. The SEC issued a report last December recommending these adjustments but has yet to act on their suggestions...
Michael Strauss, CEO of American Home Mortgage, which crashed and burned back in the summer of 2007, is reportedly looking to re-enter the mortgage business. One former executive at AHM - once a publicly traded REIT - said Mr. Strauss is "building" a new mortgage-related business adding that he "hopes to be in position within a few years to jump on the next opportunity." AHM was an alt-A and prime lender that was margin called by its warehouse lenders. Most of its servicing was eventually bought by bottomfisher Wilbur Ross...
WASHINGTON NEWS: A lawsuit filed by the National Association of Home Builders to block implementation of a RESPA rule has been put on hold while the Department of Housing and Urban Development reconsiders its position on prohibiting builders from tying price discounts to the use of their affiliated mortgage companies. "All aspects of the litigation are put on hold until HUD completes its renewed public comment process," a NAHB spokeswoman said. A U.S district court judge was scheduled to hear arguments April 3 in NAHB's suit to overturn the new "required use" provision in the Real Estate Settlement Procedures Act rule that the Bush administration issued shortly after the November elections.
MUST ATTEND CONFERENCE: National Mortgage News/SourceMedia's third annual servicing conference is gaining a lot of sign-ups. 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
