THIS JUST IN: We're starting to hear unconfirmed reports that Aurora Loan Services of Colorado is toying with the idea of originating loans again -- either through a conduit or the wholesale channel. Presumably, these would be Fannie/Freddie/FHA credits. In the old days ALS was the king of alt-A but that was a world ago when it was owned by the now defunct Lehman Brothers, a major player in subprime and alt-A. ALS and its bank affiliate were not part of the Lehman bankruptcy. The company -- which stopped funding mortgages in 2008 but still services/subservices -- had no comment whatsoever. If you have any information drop me a line at:
If you read between the lines of all the media reports about Al de Molina "resigning" from GMAC Financial Services last week you would come away thinking that its board would like nothing more than to throw its mortgage affiliate, Residential Capital Corp. overboard. It seems auto lending is where GMACFS wants to be and that the board doesn't want to commit any more money to ResCap, which still uses the trade name GMAC Mortgage. GMAC used to have an active subservicing business that Tom Donatacci managed until he left for greener pastures. Will ResCap -- which is Tommy Marano's operation -- be sold? Can it be sold in this market? According to National Mortgage News' Quarterly Data Report, ResCap has $383 billion in mortgage servicing rights on its books, and ranks fifth nationwide. It is also funds about $20 billion a quarter in home loans. To order the QDR send an email to:
I continue to be totally confused about the nonperforming real estate loan market -- to the point where, you might say, it's really starting to bother me.
Here's why: housing and commercial markets won't start to recover until banks, thrifts and Wall Street firms start unloading their $1 trillion or so in massive holdings of delinquent mortgages. So far, I would guess that maybe $10 billion in bad mortgages have been sold in the NPL market in the past six months, or just 1% of the problem. (At NMN we're now collecting NP asset figures from banks and publishing them in both our newspaper and our e-newsletter, Managing REO, which Jennifer Harmon of our staff runs.) Until banks start selling their NPLs, real estate markets will not reach a floor and a recovery will not happen until a floor is found. If we've only sold 1% of the problem -- and that figure doesn't include the coming deluge of commercial mortgages, where does that leave us? The only thing preventing this crisis from going totally nuclear (as in meltdown) is the change in FASB accounting rules on mark-to-market and hope (pray for us, Lord) that unemployment improves and workers start returning to all those not-very-full office buildings, strip malls, and idled factories...
Commercial real estate deal of the young century or just another bottom fisher? You decide: In Michigan the Pontiac Silverdome -- once home to the Detroit Lions -- was recently sold for $583,000, or about 1% of the $55.7 million it took to build in 1975. Folks, that's not a misprint. See the article at:
Recently, billionaire investor Wilbur Ross -- who's teamed up with former Fannie/Freddie regulator Jim Lockhart -- predicted that the U.S. is at the beginning of a "huge crash in commercial real estate"...
The Mortgage Bankers Association released its 3Q delinquency report on Thursday and the results were hardly surprising: late payments and foreclosures (on a national level) of just over 14%. Prime delinquencies continue to rise (6.84%) but what might be considered a (good) surprise is the late payment rate on loans backed by the Veterans Administration: 8.08% -- almost flat from 2Q, the only loan category to boast such a claim. Delinquencies by servicer are published in NMN's QDR...
MACRO ECONOMIC STUFF: The stock market meltdown of the past 18 months has caused investors to seek a safe haven in Treasury bonds. As bond prices increase (because of demand) yields will stay low -- which means mortgage rates will stay low for awhile. Will the Federal Reserve stop buying Fannie/Freddie securities and debt come next Spring so they can wind down its liquidity program? Don't bet on it. Meanwhile, gold is trading at $1,100 an ounce. I remember when it was $300. Will this lead to another asset bubble, and if so, who will be hurt by a gold bust? Banks? I don't think so. Nations that have been buying gold? You're getting warmer...
Add actor Nicolas Cage to the list of celebrities losing their homes during the housing downturn. (Should we take up a collection for the actor who's received good reviews for his new movie 'Bad Lieutenant'?) Apparently, mortgage lender Regions Bank of Alabama took title to two multi-million-dollar homes -- both in the New Orleans area -- from Mr. Cage. But according to press reports, the nephew of Godfather director Francis Ford Coppola owns something like 20 homes. He's sort of like the Imelda Marcos of housing. And now I'd like to thank Wall Street for causing the mortgage and housing crisis because if they hadn't I never would have the opportunity to write about the 'stars'...
Paulson & Co., the New York hedge fund that made a killing shorting the ABX index a few years back, believes Bank of America's share price will double within the next two years. (It's currently at $16 and change.) John Paulson, head of the fund, made this prediction in a letter to the firm's clients. BoA, however, is holding billions of dollars in nonperforming residential loans, which it seems in no rush to get rid of...
WASHINGTON NEWS: The horse is out of the barn, the doors have been closed and locked. The barn has burned down but that hasn't stopped the Comptroller of the Currency from saying regulators worldwide should prohibit lenders from making payment-option adjustable-rate mortgages and other negative amortizing products. "We should generally prohibit the lowering of monthly payments through so-called negative amortization mortgages, which have performed terribly," OCC chief John Dugan told an international banking conference in Tokyo this past week.
MORTGAGE PEOPLE: Bank of America/Merrill Lynch has hired Chris Flanagan to head mortgage and structured finance research. He was co-head of securitized products research at JPMorgan Chase.
QUESTION OF THE WEEK: With Thanksgiving upon us, who's the biggest turkey in the mortgage industry? Send emails to:
DATA NOTICE #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 email to:
DATA NOTICE #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 'Mid-Year 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 email 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: It's Friday and that means the FDIC is about to close some banks.
