THIS JUST IN: Guess which banks - some recipients of billions of dollars in TARP funds - have been buying, in the private secondary market, AAA-rated "toxic" mortgage bonds for prices as low as 60 cents on the dollar? That's right, folks, it's JPMorgan Chase, Wells Fargo and Citigroup. One mortgage manager who works for a REIT that also is a buyer said the AAA-rated securities are being scooped up at bargain basement prices. "It's sort of ironic," said the manager. "Citi is on government life support and they're buying this stuff at 60 cents on the dollar." Keep in mind that in its 1Q earnings statement, JPM chief Jamie Dimon proudly announced that his bank had scooped up $34 billion in MBS during the quarter. Translation: if you think private sector banks want to partner with the government to buy toxic mortgages, think again. It's believed that quite a bit of JPM's purchases involved senior tranche discounted MBS. Other buyers of toxic assets include Blackrock Financial and PIMCO, Bill Gross' outfit. As we reported a few months back some 'scratch and dent' investors are buying performing mortgages for prices as low as 70 cents on the dollar. Why would an institution sell at those prices? Answer: because they're re-underwriting loans, discovering that there were program violations...
National Mortgage News and its data gathering affiliate the Quarterly Data Report has just released its Annual Data Report, which includes full year 2008 rankings on the nation's top 100 lenders and servicers, including subprime servicers, FRM lenders and much more. The results show (among other things) that U.S. Bank Home Mortgage, Flagstar, Branch Banking & Trust Mortgage, and Franklin American Mortgage are lenders on the go. To order the ADR drop an email to:
Meanwhile, Ginnie Mae issuers hit the leather off the ball last year. The top three issuers - Countrywide/BoA, Wells, and JPMorgan - had growth rates of 190%, 264%, and 250%, respectively. The full issuer list is in the ADR (See above)...
And as long as we're on the topic of Ginnie Mae (formally the Government National Mortgage Association) keep in mind that two years back Washington Mutual chief Kerry Killinger made the strategic decision to exit the FHA/VA market. Nothing like getting out of a business before it booms...
A few left over tidbits from the NMN/SourceMedia servicing show in Dallas: FHA's 'Hope for Homeowners' program needs to be fixed to make it more friendly to institutional investors who own the end bonds; seven out of 10 seriously delinquent homeowners currently are not in any type of loan modification process; and this from Jay Meadows of Rapid Reporting: "are you going to trust someone who isn't paying you to tell you the truth?" Jay's comment was in regard to loan modification fraud...
The nation's seven mortgage insurance firms wrote just $194 billion in new residential coverage in 2008, a 46% decline from the prior year, according to new figures compiled by National Mortgage News. Meanwhile, MGIC's board of directors received a nice little pay raise for 2009. It's all in MGIC's new Securities and Exchange Commission filing...
Congressional TARP cop Elizabeth Warren (and a friend to mortgage brokers everywhere) was on The Daily Show with Jon Stewart this past week, slamming Treasury's accounting of how much bailout money has gone out the door. Ms. Warren says $590 billion in taxpayer cash has been spent. The Treasury's figure is a bit lower. "There is a dispute over" how much has been spent, she said. Meanwhile, she also said that for every $100 of tax dollars spent buying preferred shares in banks, the government (taxpayers) have received just $66 in value. Why? Because the secondary market value of these preferred shares has fallen. At least that was her argument. And I was just kidding about Ms. Warren (she of Harvard) being a friend to loan brokers. Ms. Warren does not like loan brokers in the least...
Mortgage bankers take note: one fact that hasn't been widely reported is that the cost to service loans is beginning to rise, in some cases significantly. The Mortgage Bankers Association is still working on its annual cost survey but chief economist Jay Brinkmann noted recently that "costs per loan are way up." The reason for the rise? No secret there: loan modifications...
We continue to hear stories about scattered loan modification scams. One loan investor told us he ran into a loan-mod company operating in Southern California under five different names. He said the loan-mod company temporarily prevented him from foreclosing on one of the loans he bought and then tried to work out a settlement with him -- which he declined. The investor said the loan-mod firm is charging consumers between $2,000 and $5,000 for their services...
A few weeks ago I raised the issue of a century-long curse that has been placed on the New York Mets because their new stadium (Citifield) is being sponsored by Citigroup, which is partly owned by the taxpayers. (Citi's mortgage business slipped dramatically last year and its wholesale business is down significantly.) Now the Mets have to deal with this: Pyramid scheme swindler Bernie Madoff is apparently a Mets fan. Last Sunday, two opening-day Mets tickets (part of a season ticket package formerly owned by Mr. Ponzi himself) fetched $7,500 in an eBay auction. The price of the tickets spiked dramatically in the auction's final minutes, nearly doubling from a cost of $3,800 two hours prior to the auction's close. At least, Met fans still have the memories of '69 and '86. Don Henig, keep your chin up...
The relocation business is so bad that Prudential Relocation in Washington laid off about 80 workers in its Washington office, according to one source in the building. Relocations involve moving executives around the nation - and getting them a mortgage...
KIDS TODAY: A fourth grade elementary class in Houston drew pictures and wrote kind notes to employees of American International Group as part of a class project. According to a report in The Washington Post, the idea was part of a lesson in empathy. The students were told that many good AIG employees did not cause the insurer's problems and even received death threats. Who says the media has no heart! Take that all you journalist bashing media haters who live on Rush Limbaugh and that Irish guy on Fox! My favorite card was written by a student who wrote: "It's not bad. Keep working hard. Keep eating your vegetables." Of course, the kid doesn't know a credit default swap from a hockey puck.
WASHINGTON NEWS: Is a compromise coming on mortgage cramdown legislation? Maybe, just maybe. Something could break next week. See Brian Collins' story in Monday's NMN. Don't subscribe? Call: (800)221-1809...
MORTGAGE PEOPLE: Former Merrill Lynch chief, Stan O'Neal, a central character in the book "Chain of Blame, How Wall Street Caused the Mortgage and Credit Crisis," has been named to the board of American Beacon Advisors, an asset management firm based in Fort Worth. Mr. O'Neal signed off on Merrill's $1.2 billion purchase of First Franklin Financial Corp., which later crashed and burned.
THIS COLUMN IS STILL FOR SALE: At the servicing show some of you who read this column were not fully aware that it is the property of National Mortgage News. Note: this column has only ties to NMN and its affiliates. I'm told you can even buy an ad on it if you're bossy enough. For info 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:
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:
