THIS JUST IN: Wells Fargo & Co. reorganized its MBS and loan trading desk. The action went down in St. Louis a few days ago. For the full details on who's in and who's out see the Monday, Oct. 19 paper edition of National Mortgage News. Don't subscribe? Call 800-221-1809...
The mortgage and banking industries have been socialized, no doubt. Uncle Sam has come to the rescue of Wall Street (too big to fail); Fannie Mae and Freddie Mac (too big to fail and they guarantee half the existing market); the automakers (OK, they have nothing to do with mortgages but you can file this one under "employ too many to fail"); and our commercial banks (too big to fail, too), but why oh why hasn't Uncle Sam come to the rescue of the mortgage insurance industry? As already reported in NMN the Treasury Department has a plan on its desk whereby TARP money can be used to prop up the sagging MIs. The MIs cover the first 20% of losses on delinquent mortgages. Those loans are held overwhelmingly by the GSEs. Maybe Treasury could be thinking this: "Why prop up the MIs? We're going to take the hit one way or the other so why put more money out of pocket now? Who knows, maybe the MIs will survive after all." Who knows indeed? MGIC just posted another blood-curdling loss. (See Bonnie Sinnock's story on our website for the full story.) Genworth Financial's MI business looks OK and is even insuring 5% down mortgages again. Republic Mortgage Insurance also is holding its own. And then of course, there's a new MI firm called Essent which has at least $500 million in capital behind it and no "legacy" loans to deal with. Getting back to the MI industry: What will it take to get Treasury's attention? What has the Mortgage Insurance Cos. of America been doing about all this? Every time I ask them a question about the MI plan at Treasury they have no comment...
By now you've seen the recent round of earnings from some of the mega-banks/investment banks (JPMorgan, Goldman) and you're probably thinking: these are great numbers. No so fast, folks. The stock market is up 52% since the spring and JPM and Goldman are brokers. They make fee income on stock and bond trades and chances are they're trading for their own accounts, too. I will guarantee you this: if it weren't for the stock market boom of the past six months they'd be looking at much worse results. Then again, mortgage originators are making nice profit margins on new production. Of course, next year is looking a bit dicey in terms of originations...
By the way: with all those booming profits at the Street firms you can bet that some traders are salivating at their coming bonus payments. This past week, Elizabeth Warren, chair of the Congressional Oversight Panel on TARP, said she is "speechless" in regard to those potential bonuses. As Scooby Doo might say, "Rut Roh." Readers of this column might recall that Ms. Warren is a big fan of loan brokers. (I'm being sarcastic)...
Special thanks to Jaymes Financial of Virginia. This past week JF actually confirmed that it sold a $285 million portfolio of nonperforming second liens. We will publish the buyer and seller's name on Monday. Most brokers that play in the nonperforming space won't tell you boo on the record. Who knows, maybe this is the beginning of more openness in the NPL market...
General Electric's 3Q results (not surprisingly) were hurt by its subprime lending unit in the United Kingdom. GE has had a presence over there for several years. In the mid-2000s the parent of CNBC got burned in the U.S. subprime market by buying WMC Mortgage at the peak of the market and then liquidating it. They sent a Frenchman from Europe to close WMC. Perhaps, the same gentlemen can do the same for its British operations which is just a short ride through the Chunnel...
Mortgage and housing lobbyists take note: Time is running out on the $8,000 first-time homebuyer tax credit. Nov. 30 is fast approaching. It's time for all good lobbyists to camp out in Gucci Gulch (the halls of Congress) and plead (and donate money to) our elected officials. Who cares that the FTHB has cost the U.S. Treasuryabout $15 billion so far? When you have socialism it's like taking money out of one pocket and putting it in another. Isn't that the beauty of socialism? Meanwhile, as long as Uncle is giving money away some GOPers want in on the game. Republican Rep. Thaddeus McCotter of Michigan has thrown pet owners a bone by sponsoring a bill that would allow them to deduct animal care expenses from their taxes. The bill is called the Humanity and Pets Partnered Through the Years or HAPPY Act." Readers, I don't make this stuff up...
Reverse mortgage lenders take note: there will be no cost-of-living increase for Social Security beneficiaries this year which means...
UPCOMING IMPORTANT INDUSTRY MEETINGS: In November NMN and SourceMedia will be holding a loan modification show in Dallas. For more details e-mail
WASHINGTON NEWS: Regulators are preparing workout guidance on commercial real estate loans that encourages banks to refinance these mortgages despite declines in property values. Federal Deposit Insurance Corp. chairman Sheila Bair told a Senate panel the guidance would be issued soon. "Collateral is a secondary source of payment and should not be the primary determinant to close down lines of credit or deny a refinance because of weakened collateral value," Ms. Bair testified. She stressed, "FDIC focuses on borrowers' repayment sources, particularly cash flow, as a means of paying off loans." FDIC-insured banks hold $1.1 trillion in CRE loans, or 14% of all loans and leases.
MORTGAGE PEOPLE: Appraisal management company Solidifi has named Griff Straw, a 30-year veteran of mortgages, as its new president. Most recently he was a regional vice president for United Guaranty. He also worked at Freddie Mac.
DATA NOTICE No. 1: Need soup-to-nuts statistics on the nation's top residential (and commercial) lenders and servicers? The new MortgageStats.com data product is ready. The user-friendly M-Stats 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 offer MortgageStats.com you can still subscribe to the Quarterly Data Report and Alternative Products QDR, spreadsheet products that provide readers with quarterly rankings on the nation's top lenders and servicers. There's also a companion product called the "Midyear Data Report" which offers half-year rankings on lenders, servicers and more. There is an Alt-QDR version of this as well. Again, shoot an e-mail to
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.
THE LAST WORD: We understand that the FDIC may soon start selling mortgage servicing rights. Have a nice weekend. Go Angels!
