Dan Phillips, former CEO of FirstPlus Financial, give me a call: apparently the 125% LTV market is back! And guess who's driving it? That's right: Fannie Mae and Freddie Mac. Late this past week, the Obama administration loosened eligibility standards on the Making Home Affordable program, which allows "at risk" consumers to refi into GSE-backed loans. When the program was first introduced the LTV cap was 105%. Now it's 125% - based on current appraisals. All kidding aside, I hope the program does, in fact, save some borrowers from foreclosure - especially given Friday's unemployment report, which revealed that U.S. companies shed 467,000 positions in June, driving the jobless rate to a 26-year high of 9.5%. If laid-off workers looking for full-time jobs (but working part time) are factored into the numbers, the unemployment rate is really 16.5%. Mortgage servicers can ponder what might happen to their delinquencies in the months ahead if the White House's "shovel ready" works projects don't start hiring soon. Meanwhile, financial service companies soon will begin reporting second-quarter earnings, which will give us clues (hopefully) as to whether the nation will see an economic turnaround in the second half - or whether that's just wishful thinking on the part of economists who are working under the belief that "this thing has to turn around soon." As for FirstPlus, that publicly traded firm collapsed in the late 1990s. The "private sector" high LTV loan that blossomed last decade was based on two government-backed mortgage programs: Title I and 203(k). The original idea behind the programs was to give borrowers money to fix up their homes in the hope that once the repairs/upgrades were done, the house would be worth, say, 100% of the loan amount or even better. It was a nice little grassroots idea that allowed inner city urban pioneers to buy beat up old row houses and fix them. The problem with the program: investors began to use it. And once the private sector got involved, well, you can read a book or two about it. Question: Which investment banking firm (among others) was backing FirstPlus? Answer: Bear Stearns, which is now the property of JPMorgan Chase...
As for JPM, its chairman and CEO Jamie Dimon recently penned an op-ed piece in The Wall Street Journal, blaming payment-option ARMs for a "big chunk" of the mortgage crisis. Mr. Dimon's residential unit, which goes by the name "Chase," avoided negative-am POAs. However, in its op-ed Mr. Dimon doesn't mention the huge role JPM played in subprime wholesaling. For the full story see the "Inside Take" column in the paper version of National Mortgage News. Don't subscribe? Call 800-221-1809...
And now for some good news: a few company anniversaries to note: mortgage software provider Doc Magic recently turned 20 years old. Celink, a reverse mortgage subservicer, turned 40. Celink has an interesting pedigree: it started out its life as a data center for nursing homes in Michigan. Its chief competitor is Reverse Mortgage Solutions...
And now for some bad news: Mortgage Originator magazine has folded. It subscribers will be shifted over to Origination News, a sister publication to NMN. ON and its website (BrokerUniverse) cover the retail loan officer/broker/wholesale/correspondent waterfront. For a sample copy call 800-221-1809 or visit the BrokerUniverse website at
From my "Chain of Blame" co-author Matt Padilla, who covers the housing market in Southern California, "Investors announced bids within seconds of each other on some steeply discounted foreclosures auctioned on Friday in front of the Santa Ana Courthouse. I attended the trustee's sale to gauge investor interest these days and to see if the state's foreclosure moratorium, which began earlier this month, is having any impact. Whenever I attended auctions in 2007 and 2008, investors generally passed on properties. But on June 26 they jumped on houses and condos with discounts of greater than $100,000 on the debt and fees owed on each property. For example, at least four people bid on a two-bedroom house in Anaheim on Zeyn Street. Winning bid: $206,000. Amount owed before foreclosure: $565,000. Discount: $359,000." Matt's fine work appears in The Orange County Register...
The Annual Alternative Products Quarterly Data Report is now available. It has complete rankings on the nation's top alt-A, jumbo and second-lien funders and servicers. To order a copy drop an e-mail to
WASHINGTON NEWS: A strong Consumer Financial Protection Agency would even the playing field so community banks would not have to compete against unregulated mortgage bankers in offering products and services, according to the Treasury Department. "If you are a community bank or credit union, the last thing you want to do is compete against a set of unregulated players outside the system," Treasury assistant secretary Michael Barr told reporters this past week, including NMN's Brian Collins. What do loan brokers think of Treasury's comments? Feel free to post a comment at the end of this column.
MUST ATTEND CONFERENCES: This is turning out to be a very popular show. If you're involved in GSE loan modifications, servicing issues, workouts, delinquencies and related topics, check out National Mortgage News' upcoming Mortgage Servicing Conference that will be held July 20-21 in Dallas. For more information e-mail
SURVEY NOTICE No. 1: Time is running out but we still want your information. 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 fill out our annual LO survey, please visit
SURVEY NOTICE No. 2: Your mortgage banking firm (depository or non) still has time (but not much) to respond to the annual National Mortgage News/American Banker residential lending and servicing survey ritual. Results will wind up in the revamped eMortgage Industry Directory/MortgageStats.com product as well as the two newspapers and their websites. There is still time to give us your numbers - but not much! 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 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
