THIS JUST IN: CMG Mortgage, one of the nation's largest surviving non-bank lenders, is hiring laid off wholesale account executives that used to work at the now bankrupt Taylor, Bean & Whitaker. Most of the hiring has been on the west coast. And in case you're wondering which firms are supplying warehouse lines to CMG the answer is: Bank of America, GMAC Bank/AllyBank, and NattyMac...
Here's a quick question to readers: what's the most important issue facing the industry these days: the future of warehouse credit, the future of loan brokers, the future of Fannie Mae and Freddie Mac, coming changes to RESPA or HVCC? Or none of the above? Drop me a line at:
Okay, now for the main event. I have to get this off my chest so here goes: The Mortgage Bankers Association wants the government to create a handful of mini-GSEs to replace Fannie and Freddie and it wants one of these to be a co-operative where the shareholders are mortgage lenders themselves. As the late great Stan Strachan would say, "That's Chutzpah." I could really let loose here but I'm going to hold back because I must be misunderstanding something. Then again, the GSE cooperative idea worked for a long time. I've probably been covering this industry too long but when I was a young cub reporter savings and loans actually owned Freddie Mac through a cooperative-like structure. If you were an S&L you owned preferred stock in the company. (Sorry, non-depository mortgage bankers were excluded and had to sell to Fannie Mae. It's great having such institutional knowledge.) The S&L industry's regulator at the time was the Federal Home Loan Bank Board. And the FHLBB chairman (Dick Pratt, Edwin Gray, among others when I first started out) was actually the chairman of Freddie Mac! Can you imagine that happening today? But wait, there's more: Freddie was profitable back then and served a key function -- providing mortgage liquidity to thrifts. Oh, but times were simpler then -- as were mortgage products. Freddie only bought conventional whole loans, issued PCs (its word for MBS) and didn't have a huge portfolio. But give ownership stake in a new GSE to the mortgage banking industry, including the mega banks? Didn't the MBA 'purchase' a subprime trade group a few years back? Let's not go there. Whatever is eventually decided on in regard to revamping/replacing the GSEs this has to happen: any GSE-like entity must be totally democratic, offering liquidity to lenders both small and large. Without such a mandate, I fear the nation's residential business will be controlled by a small cartel of mega banks, which will be bad news for the nation's consumers -- as well as the remaining non-depositories, and small- and mid-sized S&Ls, credit unions and community banks. And in case you're wondering who the top lenders were in 2Q the new edition of the Quarterly Data Report will be out late next week. On Monday, National Mortgage News publishes a top 20 ranking. (The QDR has the top 100.) To order NMN call: (800)221-1809. For info on the QDR send an email to:
Some key stats on Fannie and Freddie and the government's involvement in their operations: the Federal Reserve has purchased $624.4 billion in MBS from the GSEs and could purchase another $600 billion or so. The Treasury Department has invested $36.9 billion in capital at Freddie so far this year and $34.2 billion at Fannie, with another $10.7 billion coming soon...
Well, well, well. Guess who's back in the mortgage business? I'll give you a few hints: His last name starts with an 'A,' and one of the companies he once worked for was merged into the wholesale division of a big subprime lender whose name also starts with an A. His brother owned the subprime lender and you might say the brother was in the news a lot because he was tight with George W. Bush. And some of his management team includes former officials at Washington Mutual and First NLC. A source told me this new company is an FHA lender (but what else?) and even did loan modifications for a while. The story is in the Monday edition of NMN...
The anchor/pundits on CNBC (Larry Kudlow I'm talking about you) and other TV business shows have been blathering on all week about how the government needs to wean itself from not only Fannie and Freddie but the mortgage market in general. I got news for you, Larry: the private label MBS market ain't coming back any time soon and when it does it will be for low LTV jumbo mortgages with high FICO scores. Here's a prediction: Wall Street will never again securitize subprime loans unless there is some type of government backing on them or tons of mortgage insurance or something similar. The B&C MBS business is dead, dead, dead...
WASHINGTON NEWS: The Federal Housing Administration mortgage insurance fund will not need a capital infusion from Congress, the FHA commissioner said in response to concerns that the program is experiencing larger than expected credit losses due to delinquencies and home price declines. "FHA will not need a congressional subsidy even if the congressional capital reserve ratio falls below 2%," FHA commissioner David Stevens said. For the full story see Brian Collins' story on National Mortgage News Online:
DATA NOTICE No. 1: Just a reminder but the new Mortgagestats.com data product is ready. M-Stats (which you can subscribe to) is Web-based and incorporates both the Quarterly Data Report and our annual Mortgage Industry Directory. Among other things, it has annual rankings on the top 400 lenders and servicers, including breakdowns on retail, wholesale and correspondent - and news archives. There's contact info, too, and plenty of data on servicing. And here's the best part: you get quarterly updates. To see a sample send an e-mail to
