THIS JUST IN: A Taylor, Bean & Whitaker-led rescue of Colonial Bancgroup - the nation's largest warehouse lender - is apparently a go. The $300 million deal should be wrapped up by midnight, TBW chairman Lee Farkas told National Mortgage News. For the full story see the NMN website. If you don't subscribe call 800-221-1809...
Meanwhile, NMN is wrapping up its final tally on residential loan production for the first quarter. Phenomenal gains were had by Wells Fargo & Co. and Bank of America, according to results that will published in the Quarterly Data Report. However, BoA's improvement of 132% over 1Q08 may not look so impressive when you realize that 1Q08's numbers do not include Countrywide Home Loans. To order a copy of the QDR drop an e-mail to Deartra.Todd@SourceMedia.com...It being Memorial Day Weekend, it may be a good time to consider the state of the vacation home market. Stop me if you've heard this one before: a couple (maybe with a kid or two) heads for a beach or lake get-away. They fall in love with the place and decide it would be neat to own something so they talk with a Realtor who tells them they can put 10% down and cover their payments with rental income - as long as they can find renters from May to September. In time the place will increase in value and they'll have a nice little return on their money, not to mention a place to vacation for a few weeks. Sounds easy. But for all those investors who bought second homes during the boom years of 2002 to 2007 chances are the abodes are worth a lot less, which may not be such a disaster as long as they can still rent out their second homes. And therein lies the key: will rental payments help these mortgages stay afloat or is the economy so bad that consumers stay home and head for the local pool? I anticipate that the vacation home market is in for some major price declines, something I blogged (er, I mean wrote) about in my book "The $700 Million Bailout." (http://bailoutbook.com). Something else I touched on in the book: that the TARP bill is so vaguely worded that Uncle Sam can use federal funds to bail out a state (for example). Now, let's see which state is on the verge of going bust. Hint: there's a new "Terminator" movie opening this weekend...
Ditech.com of Costa Mesa, Calif., an Internet/telephone direct-to-consumer lender is still advertising like crazy on television. According to an ad I saw on CNBC this week Ditech is offering jumbo loans with rates south of 4.5%. Of course, the ad didn't say anything about points, FICO scores, or equity or maybe it did but the print was so small I couldn't see it. Actually, one reader wrote in, telling me that Ditech has "a pretty thorough disclaimer in the advertisement. You just have to have the capability to freeze the screen to read the extremely fine print that flashes in an instant on the screen. I did this a while back on a 30-year fixed that was slightly higher than I was offering and the fine print listed: 80% LTV, 740, may have been 780 FICO with 2 points." Thanks to LaMarr Cromer for that bit of intelligence...Purchasers of troubled (or even untroubled) mortgages take note: if you buy a residential lien you will have "affirmative disclosure obligations" to consumers under the new Helping Families Save Their Homes Act of 2009, which Congress passed this week. According to Laurence Platt of K&L Gates LLP, even though the law has a "safe harbor" for servicers, the new statute will subject purchasers of mortgage loans to civil liability if they fail to make the required disclosures. One nonperforming loan investor told us the law is a minor headache for him, noting that his firm will send "Hello Letters" to consumers...We are a nation of savers again: According to Deutsche Bank: the U.S. "personal saving rate has jumped abruptly from near zero to more than 4% in recent months, a very large increase by historical standards. The increase has encouraged speculation that the saving rate could soon be on its way back to double digits"...Is it the second half yet? Federal Reserve chairman Ben Bernanke and his colleagues continue to believe that business sales and factory production will begin to recover gradually during the second half of this year as President Obama's stimulus package and the Fed's aggressive efforts to lift the country out of recession take hold. They also pointed to signs that the recession's grip was easing in the current quarter...FACTOID: The Federal Bureau of Investigation currently has fewer than 250 special agents assigned to financial fraud cases, which is only a quarter of the agents the FBI had at the time of the savings and loan crisis...Who says that hard-money real estate lending is dead? Robert J Taylor & Associates of Boca Raton is still doing hard-money commercial RE deals. Mr. Taylor recently posted on National Mortgage News' "Grapevine" website which can be found at http://mortgagegrapevine.com/...What's the "right" employee-to-loan ratio for servicing firms that are trying to slog through a portfolio of nonperforming or "high touch" mortgages? It all depends on who you ask. One West Coast investor I know said his ratio is 1-to-25. Some firms consider 1-to-100 sufficient while others think 1-to-50 is fine. The ratio also depends on just how bad your mortgages are. Meanwhile, with all this talk of the White House cracking down on executive pay there's a fear the executive branch might even try to clip Realtor compensation. One reader wrote to me saying, "I heard a group of Realtors expressing concern their commissions may also be regulated if the government is successful in regulating mortgage brokers, bankers and other financial providers." My take on this? Answer: I highly doubt it. The National Association of Realtors has a powerful lobby...WASHINGTON NEWS: A loss mitigation approach that Fannie Mae pioneered has turned out to have an extremely high redefault rate and now the GSE is scaling it back. Fannie launched the HomeSaver Advance program in February 2008 as a way to help homeowners catch up with their payments - and to allow Fannie to avoid the expense of purchasing nonperforming loans out of securitized pools. Delinquent borrowers could qualify for small personal loans of up to $15,000 to tide them over in the case of job losses/employment changes. No payments are required on the unsecured loans for the first six months.MUST ATTEND WEBINAR ON HVCC: Hosted by SourceMedia, the publisher of National Mortgage News. Learn the ins and outs of HVCC. For more information visit http://register.sourcemediaconferences.com/click/clickReg.cfm?URLID=3825.MUST ATTEND CONFERENCES: Our Mortgage Servicing Conference recently held in Dallas was such a success that we're holding another one: July 20-21 in Dallas. For more information e-mail Julie.Dienes@SourceMedia.com.SURVEY NOTICE No. 1: Loan officers for retail shops and brokerages, we want to know all about your business last year and what you expect for this year. To bill out our annual LO survey, please visit http://brokeruniverse.com/losurvey/.SURVEY NOTICE No. 2: 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 e-mail to Deartra.Todd@SourceMedia.com.DATA NOTICE: You can now pre-order the upcoming eMortgage Industry Directory which includes a subscription to MortgageStats.com. With this product we are significantly expanding our offerings in the data/information services space. One option subscribers will have is to get quarterly updates. We'll also offer a special white paper on "Ten Mega Lenders to Keep an Eye on in 2009/2010." To advance order the eMID/Mortgagestats.com e-mail Deartra.Todd@SourceMedia.com or Delores.Stokes@SourceMedia.com.
