THIS JUST IN: A certain GSE is about to hike the minimum net-worth requirement for its mortgage seller/servicers. The change likely won't be effective until Jan. 1. For the full story and details see the Monday, Sept. 28 edition of National Mortgage News. Don't subscribe? Call 800-221-1809. A subscription gets you both the weekly (which we're trying to make more analytical and feature-based) but also the premium content on our daily website...
OK, enough commercials. Now, for the main event - that would be the Federal Housing Administration and loan brokers. This past week I received a near record number of e-mails about the FHA's decision to stop policing brokers, ceding that task to government approved wholesalers. There's a fear that wholesalers might use the mandate like a blunt-force instrument to beat brokers into submission. One broker wrote to say he's already being put through a number of hoops by his wholesaler who now wants copies of his branch licensing agreement, copies of licenses for all of his LOs, amended articles of incorporation and much more. What follows is some of the more poignant comments (edited by me, in part): "The decision for these 'too big too fail' institutions to police FHA third-party brokers is an easy one. What they are really doing is conspiring to create monopolies." (Larry Rubinoff.) "The mega-banks will not police the brokers. They will throw them under the bus. Why pay them for something they can do retail and make more money?" (Patti Gelb.) "I use Wells Fargo Wholesale and they say to me they want broker business. I think a broker office should register with the FHA." (Dolores Garcia.) "Wholesalers that do business with brokers on the conventional side are already burdened with policing brokers." (Martin Farris.) I will publish more in the week ahead. Keep them coming to
Among the many changes FHA has proposed is doing away with the net-worth requirement for loan brokers. One question mortgage professionals might want to ask is: "What type of asset can qualify for net worth?" We kicked a few tires and secured a list of assets that FHA considers "unacceptable." Here's one that stood out: any asset that the government believes is "not readily marketable and for which appraised values are very subjective." In other words, if you own a bunch of old Beanie Babies, Cabbage Patch dolls, or baseball cards (the latter being the most value of the ones I just mentioned) and plan on counting these as "assets," FHA may not be so receptive. As for your Pokemon card collection, the jury may still be out...
There's talk (merely talk at this point) that Fannie Mae is on the verge of pulling the credentials on one of its New England seller/servicers. This is unconfirmed but we're looking into it. Fannie is in the process of hiking its minimum FICO score...
Earlier this year Jon Daurio of Kondaur Capital explored the idea of buying a bank. Kondaur invests in distressed mortgages...
Two more mortgage vulture funds went public this week. Both invest in commercial mortgage and related assets. See NMN Online at
Things must be looking up for Residential Capital Corp./GMAC and its Ally Bank affiliate. The firm is now warehousing, and just launched a new correspondent division, which appears to open to the idea of funding broker-sourced loans...
Even though grandma no longer has to worry about the Obama administration "death panels," nonbank financial institutions do. At least, that's what you might gather if you heard Rep. Barney Frank's opening remarks midweek during a House Financial Services Committee hearing. He said - and I do quote - that there will be "death panels for nonbank financial institutions." Barney was going off on a tangent (somewhat) and later clarified that he was talking about large "too big too fail" institutions such as AIG and Lehman. Supposedly, in a memo that's floating around Washington, Rep. Frank (when it comes to the Consumer Financial Protection Agency) says he wants depositories and nonbanks to be treated equally - and that this supposedly applies to mortgage lenders...
WASHINGTON NEWS: Where's FM Watch when you need them? Someone call Mike House, Hank Greenberg and Beneva Schulte. (OK, maybe not Hank. His ongoing battle with AIG is keeping him busy.) Anyway, the Congressional Research Service says, in a new report, that the nation's housing market might be best served by creating up to 20 housing GSEs.
QUESTION OF THE WEEK: Wholesale AEs, retail loan officers and loan brokers: How often do you see your customers buying down the rate on their mortgage by paying more points? Drop me a line at
MORTGAGE PEOPLE: Dave McDonald, has resigned as a director from the California Association of Mortgage Brokers. He's with American Dream Mortgage in the San Diego area.
IMPORTANT NOTE ABOUT THE WASHINGTON OFFICE OF NATIONAL MORTGAGE NEWS: We've moved to Northern Virginia which means there are new telephone numbers for our staff. Executive editor Paul Muolo can be reached at 571-403-3851, bureau chief Brian Collins at 571-403-3837, Andras Malatinszky, director of online products at 571-403-3862, and Deartra Todd, data collection and sales at 571-403-3859. The mailing address is 4401 Wilson Blvd./Suite 910, Arlington, VA 22203.
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
DATA NOTICE No. 2: Even though we have just launched our new MortgageStats.com product you can still subscribe to the Quarterly Data Report, a spreadsheet product that provides readers with quarterly rankings on the nation's top lenders and servicers. There's also a companion product called the "Alt-QDR" which provides rankings on second liens, jumbos and much more. Again, shoot an e-mail to
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. For more details e-mail
