THIS JUST IN: There's a sticky little situation brewing involving Sovereign Bancorp, the Government National Mortgage Association and the Federal Deposit Insurance Corp. - or so we're told. It all has to do with a loan Sovereign was involved in made to Taylor Bean & Whitaker (now defunct). As reported in National Mortgage News recently, TBW borrowed heavily against its $80 billion servicing portfolio. It's the loan collateralized by the GNMA servicing that's causing potential woes for the Pennsylvania bank. The FDIC is sort of caught in the middle. For the full story see the Monday edition of NMN. Don't subscribe? Call 800-221-1809. A sub gets you access to the website's premium contact as well as the weekly newspaper...
Last week I asked readers for their thoughts on what they felt were the most pressing issues of the day in regards to the mortgage industry. Thanks for sending in your answers. The most frequent responses: the future of brokers and warehouse lending, government regulation and in particular HVCC. Keep those answers coming. One day I might publish formalized poll results. Drop an e-mail to
Now we know why Wilbur Ross hired former Federal Housing Finance Agency James Lockhart. It appears Mr. Ross is kicking the tires over at United Guaranty, the MI company that belongs to American International Group. Mr. Lockhart should be well versed on the MI industry and why Fannie Mae andFreddie Mac need them so badly. If there are successor GSEs to FanFred the MIs will be essential - now more than ever. If Mr. Ross does in fact wind up with UGI (or another such firm) he will own a servicer, a bank and an MI...
Quick question: What do Fannie, Freddie and AIG have in common? Answer: Uncle Sam owns most of their common stock, which is still publicly traded. It also should be pointed out that AIG was a charter member of the anti FanFred lobbying group FM Watch. Wonder what Mike House is up to these days?...
And while we're on the subject of the MI industry, one executive told me that when all is said and done and the crisis is finally over the MIs will wind up paying out $40 billion to $50 billion in claims...
It should be of no surprise that loan brokers continue to lose market share. This just in from NMN's Quarterly Data Report: in terms of market share, the amount of mortgages funded through loan brokers hit a new low in the second quarter in terms - just 14.9% of all originations. According to the QDR, wholesale lenders tabled funded just $87 billion in loans in the period. The full results - and a ranking of the nation's top wholesale funders and correspondent buyers - are in the new 2Q edition of the QDR. To order a copy e-mail
Also available: the new MortgageStats.com product, a new Web-based directory that is the successor product to the Mortgage Industry Directory. M-Stats has names, phone numbers, complete rankings and details (and searchable news stories) on the nation's top 400 lenders, 300 servicers, the entire HMDA database - plus our new whitepaper "The Years in Review." For more info e-mail Dee or
This past Thursday Treasury secretary Tim Geithner held a Town Hall Meeting on CNBC to discuss the nation's financial crisis. (In case you don't read newspapers, watch TV or the Internet it's a full year since the shinola hit the fan.) Anyway, Mr. Geithner took (more or less) a victory lap for the work he's done and it seemed the audience was buying most of it. But don't for a minute think we're out of this mess. Meanwhile, the Treasury chief does not believe home values will fall another 25% as some economists believe. Maybe he hasn't been to Miami?...
Jeffrey Rosenberg, head of Global Credit Strategy for Merrill Lynch (a Bank of America company), says he is now "cautiously optimistic" on the market but offers this one caveat: "Liquidity - the ability to refinance debt - stands as the largest determinant behind the improvements in the credit markets." Of course, if Uncle Sam pulls out of the market (which won't happen, he says) all bets are off...
"Maybe partying will help" - The Minutemen. Consider this foreclosure/REO-related story from the Associated Press and Los Angeles Times: a Wells Fargo executive who oversees foreclosed properties for the nation's second largest residential servicer hosted parties and spent long summer weekends in a $12 million Malibu beach house, moving into the home just after it had been signed over to the bank to satisfy liens. The previous owners of the beachfront home in Malibu lost their shirt in the Bernard Madoff scandal. The executive in question (who I won't name) was a woman. She and her husband and two children often hosted guests at the home, including a large party the last weekend of August. I'm guessing that this story was leaked to the Times by Malibu resident Barbara Streisand who is well known for not liking loud parties. Of course, Bob Dylan lives in Malibu, too, but he can't hear anymore and is usually on tour. Meanwhile, Wells (one of the nation's largest jumbo lenders, hence its loan on the house) said in a statement that it's conducting a thorough investigation of the allegations by neighbors. In case Ms. Streisand's lawyers are reading this, I'm joking, I'm joking...
WASHINGTON NEWS: Introduced earlier this year as part of the president's economic stimulus bill, the $8,000 first-time homebuyer tax credit, to date, has prompted 314,000 additional consumers to get off the fence and purchase a home. That figure comes from the White House. Again, this an "additional" number not a total FTHB figure. Meanwhile, our colleague Alek Rozens at Investment Dealer's Digest reports the FDIC is looking at bringing back some type of Resolution Trust Corp. structure to liquidate bank assets. (The RTC was merged into the FDIC many moons ago and eventually most of those liquidation employees - with nothing to do during the boom years - left or were downsized.)
THE LAST WORD: To you readers who saw last week's column and cannot afford a subscription (if you want to keep depending on free websites for your mortgage news go right ahead) it was Claude Arnall who's back in the mortgage business. If you don't recognize the last name you shouldn't be reading this.
UPCOMING IMPORTANT INDUSTRY MEETINGS: The MBA is holding its annual convention next month in San Diego. In November NMN and SourceMedia will be holding a loan modification show in Dallas. Details to come.
