There's a been a quiet battle raging between secondary market investors and mortgage bankers that sold them loans that eventually went into default. One underwriter who has worked on buyback deals told National Mortgage News that two firms haggling with investors include Bank of America (on behalf of Countrywide), Deutsche Bank (on behalf of its MortgageIT unit) and GMAC Mortgage, once a large subprime and second lien funder. "You should hear some of these conversations," said our source. "The fights are ridiculous. There's yelling and fighting and screaming." The job of these "buyback desks" is to re-underwrite delinquent loans to see where they violated loan guidelines. "The idea is to re-underwrite them and form arguments" as to why they should be repurchased, said the source. Of course, delinquent loans cannot be put back to dead mortgage companies. Meanwhile, the FDIC officially unloaded IndyMac to hedge fund mavens Chris Flowers and John Paulson, the latter of whom cleaned up during the subprime crisis by shorting the ABX Index. Even though the deal is closed there's still no specific word on what happened to the $1 billion or so (maybe more) in buybacks that Fannie Mae had with the former alt-A giant. An FDIC spokesman told us the matter has been resolved but offered no details. If you have any tips on loan buyback battles send them my way:
Colonial BancGroup of Alabama still loves the mortgage warehousing business. Who says so? CBG's warehouse chief Cathie Kissick. Ms. Kissick said the bank would like to grow its business but there are some problems. For the full story read the Monday edition of NMN. Don't subscribe to our newspaper and website? Call: (800)221-1809...
So, are we going to see a 4% mortgage soon? The Federal Reserve is certainly trying its best to get there. This past week it said it would buy $750 billion in agency MBS, plus $300 million in U.S. Treasuries. If that doesn't drive rates down, nothing will. Of course, if China stops buying our debt, watch out. Oh, and there's one other thing: before you can get the 4% mortgage you have to have a FICO north of 720 and a downpayment of 20%. But you won't hear those details on CNBC or any of the television media outlets...
As long as I'm griping about the TV media again, I might as well throw in this: in all the reporting on American International Group last week -- and the fact that the government has given the insurer $180 billion to stay afloat -- very few TV reporters (especially at ABC) explained to the viewer how the company lost all that money. We know the short answer is 'credit default swaps' but try and explain a CDS to a layman. Also, try and explain what a counter-party is and how the government doesn't want our biggest banks to tank because AIG couldn't pay off on its insurance contracts...
As for the AIG bonus money, the House voted to tax just about all the employee "retention" bonus money going to TARP firms that got $5 billion or more. The final vote tally was 328-93. Voting "yes" were 243 Democrats and 85 Republicans. It was opposed by six Democrats and 87 Republicans. Now it moves to the Senate...
Meanwhile, this Sunday, March 22, NBC's Dateline will try to explain (in layman's terms) how the mortgage/credit crisis happened, focusing in on (among others) Wall Street, Countrywide, People's Choice Mortgage, and others. I will be a guest on the show, discussing 'Chain of Blame, How Wall Street Caused the Mortgage and Credit Crisis'. Also, the BBC is planning a special on the crisis and is focusing on (among others) Roland Arnall and Ameriquest. Mr. Arnall passed away about a year ago...
The Obama White House has yet to name a new FHA commissioner but one name supposedly being kicked about is David H. Stevens, president and chief operating officer of The Long & Foster Companies, a realty firm that includes mortgage banker Prosperity Mortgage Company...
Big changes are coming to the Mortgage Bankers Association soon so stay tuned to NMN for updates. Meanwhile, NMN correspondent Lew Sichelman reports: Stung by protestors who took over the stage - and the spotlight - at its annual convention last year in San Francisco, the Mortgage Bankers Association made sure nothing like that would happen at its technology conference last week in Las Vegas. Not only were uniformed, albeit unarmed, guards posted at the door to general sessions, another set was stationed at each side of the stage. Ironically, no such precautions were in place down the hall at the Mandalay Bay convention center, where the MBA was simultaneously holding its annual fraud conference...
Need a list of delinquencies by servicers? What about top jumbo lenders and alt-A servicers? See the new Quarterly Data Report. To order email:
SURVEY NOTICE: Responses are pouring in for the annual National Mortgage News/American Banker residential lending and servicing survey ritual. Results will wind up in the eMortgage Industry Directory as well as the two newspapers. There is still time to give us your numbers. If you're a mortgage lender/servicer send an email to: Deartra.Todd@SourceMedia.com. If you work as a retail loan officer or broker visit:
WASHINGTON NEWS: The Federal Reserve this past week expanded its new TALF lending facility to help cash strapped mortgage servicers that pay advances to MBS investors to cover missed payments by delinquent homeowners. Starting in April, the Fed's Term Asset-Backed Securities Loan Facility will start accepting servicing advances as collateral in asset-backed securities. Details for the first TALF funding for mortgage servicing advances will be released on Tuesday, March 24. See Brian Collins' story in Monday's NMN.
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 email:
