THIS JUST IN: So, who are the other investors that Taylor, Bean & Whitaker lined up to invest $300 million in warehouse giant Colonial Banc? According to a new SEC filing here's just a few of the names of the companies and individuals: Allied Mortgage Group, Atlantic Bay Mortgage Group, Envoy Mortgage, Franklin American Mortgage, LendX Financial, WR Starkey Mortgage, Henry Fan, Paul R. Allen, Ray Bowman and Hungarian-American Florida developer Tibor Hollo. For an update see the Monday issue of National Mortgage News. To subscribe call 800-221-1809...
H&R Block recently tried to unload a $200 million portfolio of nonperforming, subprime, REO and performing loans that belonged to Option One Mortgage and H&R Block Mortgage. One bidder told us H&R wanted 60 cents on the dollar for the nonperforming subprime portion. This bidder says that none of the loans have sold so far...
The "socialization" of the nation's financial sector continued unabated this past week. The Obama administration launched a trial balloon detailing a plan to create a new financial "uber" regulator and rewire decades of old charters and rules and stuff like that. Of course this is the same White House that forced the Troubled Asset Relief Program on our mega-banks (spending $700 billion of tax payer money in the process), seized control of Fannie Mae and Freddie Mac - as well as AIG, which controls a top-ranked mortgage insurance company. Wait a second, all that was done by the Bush administration. Never mind. I guess I'd better stop watching Fox News...
As for the "uber regulator" idea - it's probably dead on arrival. Banks and Wall Street have powerful lobbyists who still have a seat at the table despite the $700 billion bailout. Come to think of it - many regulatory agencies have their own in-house lobbying firms. Will re-arranging the regulatory chairs really make a difference? Maybe the answer is to just hire good people to enforce laws and regulations that are already on the books. That's what the Office of Thrift Supervision did. Actually, that's a bad example. But seriously: at the very least credit default swaps need to be regulated...
I'm continuing to work on the paperback version of "Chain of Blame, How Wall Street Caused the Mortgage and Credit Crisis" with my co-author Matt Padilla of The Orange County Register. One tidbit I've turned up is that some journalists were the recipients of "Friends of Angelo" loans. Stay tuned...
Believe it or not Impac Holdings - the former alt-A giant - is still alive. The company is traded on the "pink sheets" under the symbol IMPH.PK. And Bill Ashmore is still there. A few days ago the company announced an offer to purchase all outstanding shares of its 9.375% Series B cumulative redeemable preferred stock...
There are many interesting revelations in PennyMac's new IPO filing, including its warnings that it has no repurchase agreements or bank credit facilities in place "and there can be no assurance that we will be able to obtain one." Actually, to some it may read like the usual standard warnings stuff for a young company but Stanford Kurland's company notes that the Federal Deposit Insurance Corp. is holding about $3 billion in residential loans from failed banks. In the same filing the company expresses some concern that "publicity and media attention" concerning litigation and investigations involving Countrywide Financial Corp. may have an adverse impact on its operations. The reason, of course, is that PennyMac's CEO is Mr. Kurland, a former president of CFC. (He worked there for 28 years, starting out as an accountant.) Then again, Mr. Kurland left the company in the summer of 2006 well before the mega-lender/servicer ran into deep financial trouble. Mr. Kurland also (smartly) dumped most of his holdings in the company. In fact, two days before company chairman Angelo Mozilo gave him the boot (resigned under pressure) he sold about $130 million worth of CFC stock. In PennyMac's IPO filing the company notes that former Countrywide officers - including Mr. Kurland - have been named as defendants in Countrywide-related lawsuits. "However, we cannot assure you that existing or future, if any, investigations or litigation will not generate publicity or media attention or adversely impact" PennyMac's ability "to conduct their respective businesses." The SEC document notes that Mr. Kurland isn't the only current PennyMac employee who used to work at Countrywide. There are others and some are defendants in CFC lawsuits as well. For the full editorial analysis of the PennyMac IPO see the "Inside Take" column in Monday's NMN...
Shares of Moody's Corp. fell sharply late this past week after hedge fund manager David Einhorn disclosed he was shorting the ratings agency. Einhorn's Greenlight Capital manages $5 billion in money. One of his worst bets ever: investing in New Century Financial Corp., the now-defunct subprime giant...
A few weeks back I filed a story about how prices for Government National Mortgage Association servicing rights are firming up. Let me clarify: the "asking price" for government servicing has increased but it's hard to tell what the final settlement prices are. One observer of the market told me recently: "GNMA servicing is in huge demand? There's a huge demand to sell it in a traditional co-issue structure, although I think that means there's a huge supply - not a huge demand. The reports that Ocwen would be out there buying servicing are true (I've checked), if overdone in their implication that there would be a high-paying buyer entering the market. Strong and good to deal with, yes. Highly priced? Uhhhh, not so much." He added that "vultures are out there" bidding and "are fine to deal with, but don't expect them to be white knights to bail you out on price"...
WASHINGTON NEWS: The Federal Deposit Insurance Corp.'s effort to sell troubled bank loans is facing headwinds, including congressional skepticism about the public-private investment funds that would provide government financing for investors, according to agency chairman Sheila Bair. "We are finding both on the buyer and seller side there continues to be discomfort about Congress' review of this program," Ms. Bair told reporters this past week.
MORTGAGE PEOPLE: President Obama has appointed Erika Poethig as deputy assistant secretary for HUD's Office of Policy Development and Research. Ms. Poethig currently serves as the associate director for housing in the program on Human and Community Development at the John D. and Catherine T. Mac Arthur Foundation.
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