THIS JUST IN: A Midwestern bank plans to expand its small warehouse platform in the coming months. There's also been talk that Fannie Mae is toying with a warehouse pilot. (The latter is unconfirmed.) For full details see the Monday edition of National Mortgage News. Don't subscribe? Call: (800)221-1809...
A few days back I ran a column about a Connecticut hedge fund that planned to buy a brokerage firm in the New York metropolitan area, convert it to a mortgage bank, jack up its warehouse lines and originate like a mad man. To say the least, it garnered a lot of letters (I mean email) to this column (I mean blog.) The first thing I can say is this: there seems to be plenty of small firms out there that would like to talk to this hedge fund. And let me set the record straight: the money that is looking to enter the industry only wants to fund Fannie/Freddie/FHA loans. If you have a brilliant execution for non-prime, good luck with that. It's not going to happen. Not even Michael Milken would be interested. Also, some wags think buying a brokerage and converting it to a bank looks brilliant on paper but then comes the reality. California mortgage veteran Rich Tachine cautioned: "Have you seen the mountains of paperwork, net worth requirements and limitations (HVCC/AMC mandates, regulatory changes by the day, etc...) that hamstring today's mortgage bankers?" He added that buying a company is merely "buying cubicles, computers and paperclips - there is no intrinsic value, just overhead. Maybe he [the hedge fund] snags a few bright people and the licensing he doesn't have (in California the owner needs to be licensed in his field), but that's even more overhead." In other words, the devil is in the details. If this hedge fund goes through with its purchase, National Mortgage News will write about it. Stay tuned...
Mortgage bankers and brokers continue to complain about high downpayment requirements for condo loans and jumbo mortgages. It would appear that no relief is in sight...
Yet more nonperforming loan packages are hitting the market. Besides the $400 million Wells Fargo deal (which NMN broke) a small $50 million package is ready to launch...
Over the past six months company insiders have bought more than 25,000 shares of Redwood Trust, a publicly traded REIT that in early 2009 was gobbling up (at dirt cheap prices) the higher rated tranches of certain subprime ABS...
DATA POINT #1:: U.S. companies are sitting on $1.2 trillion in cash, according to a report on CNBC...
DATA POINT #2:: Even though the subprime industry is moth-balled (probably permanently) there are still plenty of companies out there servicing some $800 billion in A-to D mortgages, 40% of which are delinquent. To get a complete ranking, send an email to:
I may've said this before, but I'll say it again: no one ever said economic recoveries are easy. There are good and bad days. The stock market goes up, an economic indicator rises, and we all feel good for a day or two. Then it all evaporates when a new study, poll, or indicator turns negative. A few thoughts to keep in mind in the year ahead: the mortgage industry is not going back to where it was four years ago. We are all dealing with a new reality. Regulation and tight underwriting are here to stay -- unless, of course, private money is backing deals. Home building is in the tank, as is the purchase money business. Home equity lending? Don't make me laugh. But the most important thing to keep in mind is this: consumers still need loans and I sincerely believe the mortgage banking industry is going through a wholesale restructuring where any firm that builds a better mousetrap can win at this game. (Loan brokers will survive somehow unless Elizabeth Warren heads a CFPA.) But it takes capital. And brains. And honesty. If you don't have access to all three, leave now. I also believe that Congress or the regulators should cap market shares for mortgage bankers. No one firm should control more than 10% of the business. If regulators can cap deposit shares at 10%, why not mortgages. Care to comment? Post at the end of this column or drop me a line at:
WASHINGTON NEWS: Late this past week, NMN's Brian Collins' reported that Sen. Bob Corker, R-Tenn., clarified that he is dead set against the creation of a Consumer Financial Protection Agency as a stand-alone agency. Corker is/was cooperating with Senate Banking Committee chairman Christopher Dodd, D-Conn., in crafting a bi-partisan reform bill. The ranking GOPer on the committee, Sen. Richard Shelby of Alabama, has checked out of the process for now.
MORTGAGE PEOPLE: Platinum Home Mortgage Corp. named Don Grudzinski senior executive vice president for the company's "Midwest expansion" division. Don will be responsible for both residential originations and operations. He has more than two decades of experience in mortgage sales.
DATA NOTICE #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 email to:
DATA NOTICE #2: Even though we have 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 email to:
THE LAST WORD: The FDIC has pushed back its securitization plan for troubled mortgage assets into the second quarter. The plan is still a go.
