Before I get to the main event (Angelo Mozilo) it's time to take a look at the latest origination numbers from National Mortgage News and the Quarterly Data Report. The final first-quarter tally is in and there are some notables among the top residential funders: U.S. Bank Home Mortgage of Bloomington, Minn., has moved up nicely (once again) in the rankings. Its origination volume swelled 44% to $13.4 billion, good for sixth place nationwide. Also showing strong growth was Provident Funding, Burlingame, Calif. Wells Fargo and Bank of America saw loan production rise by 50% and 133%, respectively. But BoA's rise is misleading: its year-ago number does NOT include Countrywide. But here's what is most interesting about the numbers: all of the firms with nice-sized gains are STILL in the wholesale/broker market. Got that? Among the top 10 firms that experienced declines, two (Chase and CitiMortgage) have told brokers to take a hike. (In fact, Chase's Jamie Dimon, more or less, referred to brokers as ... well, you can fill in the blank yourself.) Are these new (and exclusive) originations numbers a sign that brokers are still indeed a viable force? For the complete top 100 ranking and top 40 wholesale ranking (and more) see the new QDR. For more information e-mail
I watched the Securities and Exchange Commission press conference and read the fraud complaint against Mozilo with great interest. He is, after all, a central character in the book I penned with Matt Padilla ("Chain of Blame, How Wall Street Caused the Mortgage and Credit Crisis"). Can the SEC actually win this case? The agency says (more or less) that Mozilo and some of his executives painted one (positive) picture of Countrywide to investors but privately wrote emails that suggested they had grave concerns. On May 16, 2006, for instance, Mozilo wrote an e-mail to his lieutenants, David Sambol and Eric Sieracki, saying payment-option ARMs would continue to present a long-term problem for Countrywide "unless rates are reduced dramatically from this level and there are no indications, absent another terrorist attack, that this will happen." But later that month on May 31, Mozilo said at a Sanford Bernstein conference that POAs are a sound investment for CFC and a "sound financial management tool for consumers." But if the SEC thinks Mozilo has a history of white-washing the state of the mortgage business it is sadly mistaken. In the summer of 2007 during an earnings conference call he told analysts and the press, "We are experiencing a huge price depression, one we have not seen before - since the Great Depression." After the call, the stock market tanked as did Countrywide's stock. Of course, Mozilo was selling millions in CFC stock during these past few years - all of it pre-arranged, publicized and legal, or so he has argued. There's no question that Mozilo had a giant ego and strived to (always) be No. 1 in mortgages. It's doubtful that any criminal charges will ever be filed against him in regard to Countrywide - at least in my opinion - but I've been wrong before. The last time I checked, greed, hubris and stupidity were not crimes - though you can sue for such things...
As for Stan Kurland, the man Mozilo booted out of Countrywide in 2006, the news for his vulture fund firm, Penny Mac, isn't all that uplifting. In its recent IPO filing, vulture fund PennyMac notes that the FDIC's Legacy Loan Program "has the potential to be a significant source of investment opportunities for us." But over the past few days it has become clear the FDIC is now going to use the LLP for mostly receivership assets. Stan isn't hurting for money though. He sold $130 million in CFC stock a few days before getting the official boot, which leads me to ask: Why would he even bother trying to get back in the mortgage business? For what? The fun of it all? I guess...
There goes the jumbo market in the New York metro area: roughly 25,000 jobs have been lost in the city's financial district since the summer of 2007, according to state. The finance industry could shed another 25,000 jobs by the end of 2012...
And now for some positive news: According to RBC Capital, the global financial crisis is over and bank stocks are at the beginning of a new, multiyear bull market. This past week analysts at the Canadian company upgraded the banking sector to "overweight" from "sector perform." What's next for the mortgage and banking sectors? The return of non-bank subprime wholesale lenders and ABS deals? Stay tuned...
And now for some negative news: the U.S. unemployment rate is now 9.4% and mortgage rates - and oil prices - are rising...
PNC Bank says its residential mortgage banking business earned $226 million for the first quarter of 2009 - driven by strong loan origination activity and income from servicing rights. This business segment was formed in the first quarter of 2009 and consists primarily of activities acquired with National City. Residential mortgage revenue totaled $431 million in the first quarter of 2009. Looks like PNC's takeover of NatCity is turning out to be a great deal. Historically, PNC has hated the residential business except for home equities. But at last check, PNC was still tossing NatCity's warehouse group overboard...
By the way there could be some good news on the warehouse/GNMA front. See the Monday paper edition of NMN. Don't subscribe? Call 800-221-1809...
Scratch-and-dent investors - don't forget to check if your firm is actually licensed to service loans in the states where you're buying product. We're hearing anecdotal stories where vulture funds are buying problem loans only to get their hands slapped by the state when regulators do some cross checking and discover that lo-and-behold said vulture fund is not licensed to process loans there...
WASHINGTON NEWS: Mortgage companies are scrambling to implement an overlooked Truth in Lending Act rule that goes into effect July 30 requiring timely delivery of the good faith estimate on home purchases, refinancings and home-equity loans. On applications taken after July 29, lenders must deliver the GFE to the borrower within three business days and they cannot collect any fees before delivery - except for the credit report. For the full story see Brian Collins' story on the National Mortgage News website:
MORTGAGE PEOPLE: First Financial Network, a full-service financial and loan sale advisor, has hired Mark Hall as a senior financial analyst. He joins the firm from Goldman Sachs.
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
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
DATA NOTICE: You can now pre-order the upcoming eMortgage Industry Directory which includes a subscription to
