THIS JUST IN: Guaranty Bank is throwing the wholesale division of its GN Mortgage affiliate overboard. Meanwhile, BankTennessee is starting a wholesale division, but it will be brokering (get this) other banks and maybe (just maybe) certain independent loan brokers. The full story is in Monday's National Mortgage News...
It was an interesting end to another wild and wacky week in Mortgageland USA: the Senate killed the mortgage cramdown bill and as one reader pointed out, "Even the 'final' RESPA rule is being unfinalized. Maybe the world is starting to spin on its correct axis again! Don't stop it - I no longer want to get off!" But is the battle of cramdowns really dead? Don't bet on it. As for yield-spread premiums and the future of loan brokerage in this nation, stay tuned. Maybe brokers will survive, after all. And what about Ken Lewis, the man who bought Countrywide? He lost his chairmanship at Bank of America, but kept the CEO job. Meanwhile, it appears that Countrywide founder Angelo Mozilo, the man who sold CFC to BoA, may be appearing in court. The Florida attorney general remanded a civil suit brought against Mr. Mozilo back to Broward County. The state accuses Mr. Mozilo and Countrywide of engaging in deceptive lending practices...
At roughly 11 a.m. on Friday National Mortgage News Online broke the story on Accredited Home Lenders filing for bankruptcy protection. Don't subscribe to NMN? Call (800)221-1809...
A few weeks ago I penned a column about American International Group and its credit default swap debacle. (AIG also owns a mortgage insurance company.) Since that time one MI source passed on to me a report marked "strictly confidential" that is entitled "AIG: Is the Risk Systemic?" The report details (to some degree) how far AIG's financial tentacles reach. According to the document, AIG has $1.6 trillion (yes, trillion) in "notional derivatives" exposure. Translation: it wrote plenty of credit default swap contracts that it must pay off on. These CDS contracts cover (you guessed it) subprime mortgages...
And while we're on the subject of subprime mortgages, it appears that Michael Strauss, who founded American Home Mortgage of Melville, N.Y., is back in business with a loan modification company called InstaModify. Supposedly it's affiliated with a net branch lending firm. (This last bit is unconfirmed.) But, of course, Mr. Strauss is about $2.45 million "lighter" these days because he just agreed to pay the SEC that amount for some accounting funny business at AmHome. And of course he settled without admitting - or denying what he did was wrong...
File this one under "Go Figure": NMN's James Comtois reports that on Friday, Triad Guaranty's stock price inexplicably skyrocketed, closing at 80 cents per share, up 142% increase from the prior day's closing. At its peak, the stock price reached $1.07 per share Friday afternoon, the first time it went over a dollar since early November 2008. Triad Guaranty, which is in the process of self-liquidation, had no comment. And guess who Triad's biggest MI customer once was: American Home (Strauss' shop)...
It's Friday and that means the Federal Deposit Insurance Corp. is going to take over a few banks this afternoon. First up is (drum roll, please) Silverton Bank, a $4.1 billion institution. I don't know anything about Silverton but I will bet you that it has plenty of real estate construction loans (to homebuilders) on its books...
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Cerberus Capital certainly has the "anti" Midas touch, doesn't it? A few years back the hedge fund giant bought Chrysler, which filed for bankruptcy protection earlier this week. But wait, there's more - and it's all mortgage related. Twenty-four months ago its subprime division, Aegis Mortgage, went BK. And wasn't it Cerberus that bought a controlling stake in Residential Capital Corp., which recently avoided bankruptcy at the 12th hour? I believe that was Cerberus. And wasn't Cerberus (for a while) itching to buy now-defunct subprime lender Option One from H&R Block? Yep, that was them, too. And here's one more Cerberus incident: back in 1998 the hedge fund bought bonds in Cityscape Financial, a once-highflying subprime lender that - you guessed it - went bankrupt, too. We heard that investment actually worked out OK. All-in-all, nice track record there, Steve (Feinberg)...
WASHINGTON NEWS: Loans with five-year maturities will be available for June funding through the government's Term Asset-Backed Securities Loan Facility to finance purchases of AAA-rated commercial mortgage-backed securities. Previous to this expansion of the program TALF has only allowed maturities of three years. The Federal Reserve had said in February it could broaden eligible collateral for TALF to encompass other types of newly issued AAA-rated asset-backed securities such as commercial mortgage-backed securities and private-label residential MBS. (Reporting by NMN's Bonnie Sinnock.)
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