The strangest story of the past week is the huge disparity on the 2010 residential forecasts from Freddie Mac and the Mortgage Bankers Association. Freddie looks downright bullish at $1.75 trillion while MBA looks like a skunk at the garden party with $1.3 trillion. It's the widest disparity in forecasts I've seen in years. There are days when I think $2 trillion is a good number but that's only if unemployment falls to 9%. (I'll get to the employment crisis in a moment.) Anyway, we try to sort it all out in the Monday edition of National Mortgage News - as well as what it could mean for loan brokers. As we reported on our website Friday, a former wholesale lender owned by Richard Branson could have a new lease on life. And believe it or not there could be some stirrings of life in warehouse lending. Don't subscribe? Call: 800-221-1809...
This is unconfirmed but we heard from one source that Diversified Capital Funding of Campbell, Calif., is hiring some new operations and origination employees. Diversified is Bill Dallas' shop...
THE MAIN EVENT: Pity the poor investment banker, as we all should. While traders and quants are skiing in Aspen this weekend and ordering $15 martinis, the rest of us will be buying (used) equipment online and using discount coupons for our fifth graders (in Pennsylvania). Yes, it was a good year for Wall Street and all the columnists, pundits and our beloved elected officials are piling on. The traders and quants will be pounding their fists on the bar, shouting, "I earned my bonus fair and square, dammit! And those socialists in Washington want to take it from me." (Sorry, but the M&A guys and gals didn't do so well.) The strange thing about all this is that both the left wingers and tea baggers (on the right) think our friends on Wall Street are, well, scum. I'm not going to weigh in here on that issue but if a politician really wanted to do the smart thing it would be this: let the boys on the Street have their bonuses. Keep in mind this one sobering thought: the bonuses are so large because stock prices got pumped up in a Mark McGwire-like fashion. Soaring stock values equal soaring bonuses. The White House should have decreed the following: Over the next two years we want you, Mr. Goldman Sachs, to take 10% of your bonus pool and spend it hiring new workers. If Goldman pays out $18 billion in bonuses then they should increase hiring by adding $180 million in salaries. No cheating here either - it has to be new hires that make, say, less than $150,000 a year - lots of back office workers. And no layoffs either. This way the white-collar firms that are benefiting from TARP can aid the nation's economic recovery by spurring new hiring. New hires mean more office space will need to be rented, a move that would help the real estate and commercial loan sectors. And these newly hired workers might even buy a house or refinance which would aid the residential mortgage market. Of course, some of you might think this smacks of socialism but wasn't TARP socialism, too? Isn't deposit insurance socialism? Isn't everything socialism? Feel free to send me an e-mail at the end of this column...
As for the Crisis Commission hearings this past week, I heard little that was surprising. Goldman Sachs betting against subprime bonds that another unit of the company was selling? Shocking. The same thing was going on at Deutsche Bank. One unit of DB was shorting the ABX Index while the trading desk operated by Michael Commaroto was trying to run a subprime business. It's all in "Chain of Blame, How Wall Street Caused the Mortgage and Credit Crisis" penned by Matt Padilla of The Orange County Register (and me). The paperback will be out in a few weeks with new material on TARP, vulture funds and the mortgage cartel...
IN CASE YOU MISSED IT: According to newly released figures, servicers have permanently modified 66,000 or so troubled residential loans. Of course - according to figures compiled by National Mortgage News and the Quarterly Data Report - roughly 9 million loans are in default and 60,000 is less than 1% of the problem. To order the QDR send an e-mail to
Wells Fargo & Co. executives will be cross-examined about their loan book next week in a way they haven't been in awhile, so reports our sister publication, the American Banker. Abandoning its long-standing practice of issuing prerecorded comments on quarterly earnings, Wells executives on Wednesday will present fourth-quarter results live and engage in a give-and-take with analysts. Look for a bit of dialogue on all the payment option ARMs it has, quite a few courtesy of Wachovia and Herb and Marion Sandler. I'm still waiting for the Sandlers' ProPublica "investigative journalism" unit to investigate the "Pick-a-Pay" loan phenomena. And isn't it time "Saturday Night Live" did another spoof of the Sandlers? I've said this before but my favorite story on Herb Sandler who was quoted in American Banker a few years back wondering whether World Savings really needed ATMs...
WASHINGTON NEWS: In a few weeks HUD will issue major changes to protect the cash depleted FHA single-family program, including increasing mortgage insurance premiums and asking borrowers to bring more cash to the closing table. See Brian Collins' story in Monday's NMN.
The agency is considering reducing to 3% from 6% the amount a seller can pay toward closing costs and eliminating the ability of borrowers to finance the upfront mortgage insurance premium into the loan amount.
MORTGAGE PEOPLE: Guild Mortgage, Seattle, appointed Dan Rivisto as district manager, Northwest region. Prior to joining Guild, Mr. Rivisto was a district manager for W.J. Bradley and an area manager for JPMorgan Chase. Ronald Barnett joined Mortgage Access Corp., Morris Plains, N.J., as vice president and area manager. He is responsible for developing and managing loan originations in the New Jersey region.
DATA NOTICE No. 1: Planning for the rest of 2010 and need soup-to-nuts statistics on the nation's top residential (and commercial) lenders and servicers? The new MortgageStats.com data product might be what you're looking for. 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 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
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 continue to look for more. For more information contact
THE LAST WORD: Read Managing REO, the only publication dedicated to covering the clean up of the nation's housing and loan markets. For a free sample copy send an e-mail to
Go Ravens, Go Jets.
