Before we get to the main event, there's plenty of undecided issues surrounding New York Community Bank's recent federally assisted takeover of AmTrust Bank. First and foremost is what will happen to AmTrust's wholesale division? But another huge issue is AmTrust's servicing portfolio. Will NYCB sell it? The New York area thrift has never been a player in residential finance/servicing. Its forte is multifamily. Or is all of that about to change?...
Last week in this column researcher David Olson hit a chord with brokers and small mortgage bankers everywhere when he uttered these words to me: "Maybe someone in the federal government will realize that what they've been doing is very anti-small business." I received more e-mails on that column than I have in several months. (Some were posted to the end of this column.) For the past year it's been a given that brokers would continue to lose market share and wither. That's happened to some degree and the origination figures published by National Mortgage News' Quarterly Data Report bear that out. But we may be seeing a new trend: mortgage brokers morphing into tiny mortgage bankers or joining mortgage banking firms (depositories, too) or becoming part of a net branch. It's still early in the process and the tea leaves have not settled. Stay tuned...
Next week on the NMN website we'll be running an in-depth piece by reporter Brian Collins on how the Federal Deposit Insurance Corp. is now the "ax" shaping not only key decisions on MBS rules but maybe even servicing rights...
And now for the main event: the conundrum that is Fannie Mae and Freddie Mac. Come spring the Federal Reserve will stop buying GSE debt and securities. What's so bad about that? Answer: Nothing as long as the private sector steps up to be the main buyer, which currently is not the case. Right now the Fed is the main buyer - the emphasis being on "main." So if the Fed bails how will the GSEs attract private sector buyers to their instruments? One answer is to raise the yield on the new MBS they create which means mortgage rates are going to rise. If rates rise will it slow down the "housing recovery"? Fill in the blank yourself. If the private sector stays away that means all that business will move over to the FHA which is plenty busy already and will wind up insuring $500 billion in the current fiscal year. If you think the U.S. government will step in and make the GSE guarantee "explicit" you can forget about it because such a maneuver means $5.2 trillion in GSE guarantees would go on the books of the U.S. government. This means the U.S. would have $17.2 trillion in debt as opposed to $12 trillion. Meanwhile, you're probably wondering about certain wire service stories of the past week that say Fannie and Freddie may try to get more money from Treasury because if they ask prior to Jan. 1 they don't have to go through Congress. (I'm simplifying here.) Who knows for sure, really. But there is a servicing-related issue here. Together they control $1.5 trillion in servicing rights tied to their on-balance-sheet assets. If they are forced to bring this servicing "risk" onto their books (under FASB rules that go into affect Jan. 1) then both will need more capital - immediately. The question then becomes: how much more capital?...
Marc Savitt, the former past president of the National Association of Mortgage Brokers, is mad as hell about the Home Valuation Code of Conduct and aims to do something about it. In a few weeks he meets with the New York attorney general's office (but not AG Andrew Cuomo) about the rule. As the owner of his own loan brokerage firm in West Virginia - one that celebrates its 25th anniversary next month - he continually hears stories about out-of-market appraisers chosen by appraisal management companies that don't know much about the markets they operate in. Why did the AMCs choose these appraisers and not local appraisers? "Because they're cheaper to use," Mr. Savitt told us. He said on one deal he was involved in an AMC chose an appraiser that was located 96 miles away - in another state. "This guy didn't even have access to the MLS," he said. On the home he was looking at, the appraiser came up with a price that was $50,000 less than the agreed-to contract price. You can imagine what that did to the sale...
And now for something completely different - a list of servicers with very low delinquencies: Franklin American Mortgage, Ridgewood Savings Bank and First Republic Bank. All have late payments of less than 1% on their residential servicing portfolios according to the brand-new 3Q issue of the Quarterly Data Report. To order the QDR send an e-mail to
You've heard of "Cash for Clunkers"? Well, now there's "Cash for Caulkers," a White House idea to develop incentives for home energy-efficiency retrofits. The White House says this will help create jobs, improve residential energy-efficiency, and reduce carbon emissions and the consumption of limited natural resources. The National Housing Conference applauds the idea, noting, if funded, at the proposed $20 billion, the program would create or save an estimated 360,000 to 500,000 jobs. Sounds great. Now only if we had some HELOC lenders willing to make loans. According to new figures in the Alternative Products Quarterly Data Report, second-lien lending is tanking...
MORTGAGE PEOPLE: Joe Falk's three-year term as a member of the Federal Reserve's Consumer Advisory Council is about to end. Joe is a past president of NAMB. Time magazine named Federal Reserve chairman Ben Bernanke its "Person of the Year." In praising our nation's central banker, the magazine called him "the most powerful nerd on the planet." Michael Blair, EVP and chief operating officer of Franklin Credit Management Corp.'s servicing department, plans to resign at year-end. The company said his successor would soon be named. Franklin's chairman Thomas Axon said he is "looking forward to possibly working" with Mr. Blair again in the future. Mr. Blair is said to be resigning to pursue other interests.
OTHER COLUMNS TO READ: Let's face it: this is the only mortgage column you need to read and advertise on. (For ad info contact Steve Schloss at 212-803-8200.) But if you need to be entertained on other nonmortgage issues there's always the "Mr. Gripes" column penned by former NMN salesman Jim Israel-Hollander or as the late, great Stan Strachan called him: Mr. Hollandaise Sauce. Jim's tirades can be found at
SPEAKING OPPORTUNITY: SourceMedia, the folks that own NMN, American Banker, Credit Union Journal and other publications is looking for topics and speakers for its fourth annual mortgage servicing conference in Dallas. We already have some "topics and talkers" but we're looking for more. For more information contact
DATA NOTICE No. 1: Planning for next year and need soup-to-nuts statistics on the nation's top residential (and commercial) lenders and servicers? The new
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. The new 3Q edition of both is now available. For more info shoot an e-mail to
THE LAST WORD: Several servicers and subservicers are hiring like mad. Hopefully, for those of you who are out of work, you will land somewhere soon. Best of luck.
