The biggest news of the past week? That would be the disclosure by National Mortgage News that American International Group is (more or less) in the process of liquidating its consumer finance affiliate, American General Finance Corp., which has been around (so its website says) for 85 years. Of course, AIG isn't talking about what exactly it's up to but we know this: Credit Suisse is buying $1.6 billion in AFGC nonprime whole loans. It then plans to turn around and issue securities. One executive at CS heralded the deal as a revival in the non-government private label market. My only thought is this: yeah, right. AIG is owned by Uncle Sam, which has committed $180 billion in loans and assistance to AIG. If Uncle didn't own most of AIG do you think CS would've done the deal? As for the liquidation of AGFC, the deal with CS is not being portrayed in the general business press as such but let's face it: AGFC closed 180 branches, isn't making new loans and it's in the nonprime space. And it's owned by AIG. The company has always been secretive about both its lending and servicing numbers, rarely disclosing them publicly. For the full story see Monday's NMN. Don't subscribe? Call 800-221-1809...
By the way, as we noted in our online story, PennyMac is servicing $1.6 billion in loans for CS. In an updated IPO filing PennyMac says that since its inception two years ago it has reviewed more than "60 portfolios with a face value of $100 billion". So far this year 53 depositories with combined assets of $25.2 billion - including $3 billion in residential loans - have failed. Where others see carnage PennyMac sees an opportunity. The company still hopes to go public one of these days. It currently is in its "quiet period" which means its staff can't even tell you the time of day...
We're putting the finishing touches on our new MortgageStats.com product which is an online directory that will be the successor product to the Mortgage Industry Directory. Here's one key fact from our analysis (which is still under construction): Between 2000 and 2007 mortgage bankers of all stripes originated $3.19 trillion in A- to D loans. Moral of story: that's a whole lot of loans made to people with low FICO scores or "stated" income...
Six months ago Chase, a subsidiary of JPM Morgan Chase, told loans brokers to take a hike. In the second quarter the firm's loan origination revenue fell 28% to $284 million. Could there be a connection?...
I ran into Armando Falcon, former Office of Federal Housing Enterprise Oversight chief, on the street Friday. He is no longer associated with the Canonbury Group and is now out on his own working as a consultant. He said the Government Accountability Office is working on a report concerning Fannie Mae and Freddie Mac. It's anticipated that the White House and Congress won't get around to publicly discussing the future of these two GSEs until next year...
Deutsche Bank on U.S. household debt: "At present, the household debt to disposable income ratio stands at 128%, down from an all-time peak of 133% in 1Q 2008. In the last two economic recoveries, household debt to income increased through the downturn, as consumers levered up, helping to take the economy out of recession. No doubt, households' desire to increase leverage minimized the decline in output in the previous two recessions as both 1990-1991 and 2001 downturns were extremely mild by historical standards. In fact, the peak-to-trough decline in real GDP in the 2001 recession was just 0.4%, the smallest recessionary decline on record. It is important to note the household debt to disposable income ratio was only 83% in the last quarter of recession in 1991, and it was still under 100% in the last quarter of recession in 2001. The average household debt-to-income ratio at the start of recoveries prior to 1990 was only about 60%. At today's elevated and arguably unsustainable level of household leverage, we doubt many consumers can lever up again."
In last week's column I told readers about how depressed I was recently about the state of the stock market until I saw CNBC stock picker Jim Cramer say he was feeling bearish. I noted that whatever Cramer thinks, the smart money goes the other way. Cramer recently told his viewers that stocks would tank in the short term. So what happened this past week? We got a nice little rally. Thanks Jim. Of course, if he starts getting bullish on bank stocks we're all in trouble...
WASHINGTON NEWS: The Federal Reserve Board will consider amendments to the Truth in Lending Act placing new restrictions on mortgage broker compensation. "The proposal will include new rules governing mortgage originator compensation," said Fed governor Elizabeth Duke. For the full story see Brian Collins' story on the NMN website
MORTGAGE PEOPLE: Jefferies & Co. said Lisa Pendergast has joined the firm's fixed-income division as a managing director in the MBS/ABS/CMBS Group. She will be responsible for strategy and risk for commercial mortgage backed securities. Scratch-and-dent subservicer Ocwen Financial has named Steven Nesmith senior vice president and assistant general counsel for strategic and government initiatives. Between 2003 and 2005, he was assistant secretary of the Department of Housing and Urban Development responsible for congressional, intergovernmental and industry relations.
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
MUST ATTEND CONFERENCES: The NMN servicing show starts this weekend in Dallas. If you haven't registered, we are still accepting onsite registrants. The show will focus on - among other things - GSE loan modifications, servicing issues, workouts, delinquencies and related topics. Participating vendors include REO Alternatives, Vendor Resource Management, Proctor Financial, REDC Default Solutions, Pro-Teck Valuation Services, FNC, Lenders Processing Services, Direct Group, Heart Financial, Genpact, Collateral Intelligence, Real Property Management and the National Association of Short Sales. For more information e-mail
SURVEY NOTICE No. 1: ABSOLUTE LAST NOTICE: 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: LAST NOTICE FOR THIS ONE TOO: 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 new 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: If you want to pre-order the new MortgageStats.com product let us know. 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
