THIS JUST IN: Freddie Mac late Friday announced its warehouse lending pilot program and it's pretty much what we expected. Also, Fannie Mae is working on a similar pilot. But will any of this make a difference in the devastated warehouse niche? For the full analysis see the Monday print edition of National Mortgage News. Don't subscribe? Call: 800-221-1809. Meanwhile, the pilot will be "topic A" at the upcoming warehouse lenders' forum. This private little powwow is being held in San Diego at the annual convention of the Mortgage Bankers Association...
Meanwhile, as residential finance professionals begin their journey this weekend to the MBA show they should keep this one thought in mind: the industry is up for grabs. The richest firms with the highest capital will not necessarily be the ones that are at the top of the heap two years from now. You can bank on that. Three years ago Countrywide Home Loans could do no wrong. We all know how that ended. For those of you that have been in this business for more than 10 years you might recall the names of other top-ranked lender/servicers of yesteryear - firms like Lomas & Nettleton, Homeside Lending, GE Capital Mortgage. All went down the tubes after initial successes only to sell what was left of their once high hopes and dreams (their assets) for a fraction. Mortgage banking is not an easy business - at least not any more. Still, we're attracted to it. You can make a decent living and go home at night knowing you helped someone buy a house (or refi). I know that sounds corny but it beats selling shoes or credit cards. My apologies to all the good men and women who make their living off of cards. And thanks for that 18% rate you were offering me last month and those "live checks" that continue to arrive in my mailbox. If the Consumer Financial Protection Agency does indeed become a reality - and it's increasingly looking that way - you can thank not just unscrupulous mortgage lenders (and their crumby loan programs and Wall Street) but the credit card industry and some of the stunts they've pulled over the years...
By now you've heard the news that the Federal Housing Administration will soon be joining Fannie, Freddie and AIG on the financial services scrap heap. Actually, that's far from a foregone conclusion and some industry officials are still trying to figure out how former Fannie Mae credit officer Ed Pinto (who made such a prediction this past week) got so much ink and got himself invited to a Congressional hearing. This is not to doubt Mr. Pinto's predictions but these questions are being asked in some quarters. Mr. Pinto worked at Fannie two decades ago. Meanwhile, NMN was granted a sit down interview with FHA commissioner David Stevens. The story, written by our own Brian Collins, appears in the Monday edition...
According to the National Consumer Law Center, reverse mortgage lending could be the next subprime crisis. Yeah right. We asked a spokesman for the NCLC how many reverse loans are outstanding. We're still waiting for an answer. There are roughly $900 billion in outstanding subprime loans. I have the sense that there are a lot less (a whole lot less) outstanding balances on reverse mortgages. If worse comes to worse, we can always send the elderly to those Obama-Care death panels. Just kidding...
We're beginning to hear some talk that certain lenders are getting "aggressive" when it comes to jumbo lending. Of course, the "new" aggressive means they are willing to originate jumbo and "super" jumbo loans as long as the customer puts 20% down. All new production (as you may've guessed) is being housed on the balance sheet of the originating bank or thrift. (I've also heard talk that a certain hedge fund soon might be jumping into this market as a portfolio lender.) And who are the nation's top jumbo funders? According to the Alternative Products Quarterly Data Report, Bank of America led the market in the first half with $20 billion in fundings. For the full ranking e-mail
He's back: Robert Grosser, former head of subprime lender Cityscape. He's now running a luxury lender in Connecticut. Cityscape crashed and burned during the subprime crisis of the late 1990s, a crisis that pales in comparison to this one...
ANSWERS TO LAST WEEK'S QUESTION OF THE WEEK:
I asked, "Will FHA's market share ever top 50%?" Some of the responses:
"If the economy continues like it has been through next summer I believe they will. If they reinstitute the FHA construction loan then they will for sure because builders and production builders could use that program to construct the home of FHA borrowers." - Dave Galanter.
"You bet it will. Unless the secondary market opens back up and a big player comes into the void and makes a killing. This could happen if the right company came in and seized the obvious opportunity in the market place." - Dave Schuberth.
WASHINGTON NEWS: A Federal Housing Administration loan modification program that was rolled out in August is gaining traction with larger residential servicers. "We're seeing some surprising activity with that program," FHA commissioner David Stevens told NMN bureau chief Brian Collins. The FHA Home Affordable Modification Program allows servicers to reduce the current principal amount of an existing FHA mortgage by up to 30% to make the monthly payments affordable. (See the full story on the
MORTGAGE PEOPLE: Griff Straw, a veteran of 30 years in the mortgage banking industry, has joined appraisal management company Solidifi as its president. He joins the vendor from United Guaranty where he was a regional vice president. He also has worked for Freddie Mac during his career.
EDITORIAL NOTE: The Washington bureau of NMN has 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: In November NMN and SourceMedia will be holding a loan modification show in Dallas. For more details e-mail
THE LAST WORD: Loan brokers will rise from the ashes of the industry someday but they might be called something else. Care to comment? Do so on my column.
