THIS JUST IN: That New York hedge fund that's looking to buy a well regarded mortgage brokerage shop in the greater NYC metro area is getting closer to a deal. But the signing of the documents and money changing hands could be two months off. One key to the deal: making sure this lender (which will become a banker) has strong warehouse relationships...
Last week we revealed that Residential Capital Corp. had forced out Tony Renzi, a 24-year veteran of GMAC who had helped put its subservicing business on the map. Meanwhile, we learned midweek that more heads have rolled there as well. Details will be in the Monday print edition of National Mortgage News. Don't subscribe? Call: (800)221-1809...
Meanwhile, I had a brief conversation -- and several emails -- with spokespersons for GMAC this week concerning the future of ResCap. As I noted in past columns, ResCap, as a technical matter, is not for sale. But the company is exploring its "strategic options." I asked one spokesman, "Okay, what's a strategic option?" He said he "could" tell me what some of these strategic options might be, but would rather not, at least not on the record. "Okay," I said, "how about off-the-record." But then he demurred. Confused? It gets worse. GMAC CEO Michael Carpenter was in Gucci Gulch this past week and told elected officials that "I look at ResCap as a problem to be solved, not an opportunity." I'm sure that was a real morale booster for the workers back in Horsham, Pa. Then again, let's admit it -- the future looks bright for the auto industry. I will bet you $20 that Carpenter doesn't drive a GM car...
One last note on GMAC: one of these days someone has to explain to me how Cerberus chief Steven Feinberg spent $14 billion (four years ago) buying a 51% stake in GMAC and gets to keep his job, especially after the Chrysler deal. I would guess that somewhere along the line Cerberus has hit some homeruns (but not in mortgage banking). Who knows? Maybe it was shorting the ABX at the same time. Any thoughts on this? Drop me a line at:
Well, another week, and another product type thrown overboard by the secondary market. This time around it's Freddie Mac which will stop purchasing and securitizing interest-only mortgages. You may've read the story on our website and in other publications but none of these reports say which firms are the top producers of IO loans. But we have the list -- courtesy of our Quarterly Data Report. The top three are (drum roll please): Wells Fargo, Union Bank of California, and PHH Mortgage. To get the full list, order the QDR by emailing:
I'd personally like to thank Fannie Mae for releasing its fourth quarter earnings at 5 p.m. (East Coast time) on Friday, delaying my weekend and trip to the pub. But seriously, here's one highlight (or 'low light') from the report: 10.29% of its negative amortization loans are seriously delinquent. I'm guessing a large portion of that comes from its former top 'strategic partner' Countrywide which is now owned by Bank of America, a depository that is getting hit upside the head by loan repurchase requests...
It's survey time once again. In a week or so NMN will send out its annual lending and servicing survey but currently we're asking loan officers (retail and brokers) to fill out a special questionnaire tailor-fitted to them. We are giving away complimentary subscriptions to Origination News to those who provide their 2009 origination volume. Please visit:
WASHINGTON NEWS: NMN's Brian Collins reports that industry lobbyists are having a hard time getting senators or their staff to focus on the issue of risk retention, which could dramatically reduce the securitization of mortgages. (If this happens mortgage rates, in theory, will rise.) Meanwhile, our sister publication, American Banker, reports that a Federal Deposit Insurance Corp. plan to restrict securitizations is drawing intense opposition from bankers, who claim it would damage the secondary market. In a December proposal, the agency said it was considering imposing conditions to protect securitized assets from FDIC seizure after a bank failure, including a "skin in the game" requirement, a minimum hold period for underlying loans and limits on the number of tranches. Meanwhile, the FDIC is planning to securitize billions of dollars in troubled assets and sell the bonds to the public. Here's a dumb question: will the FDIC itself face a risk retention and capital charge on its securitizations? I mean, who's watching its books? I wonder if the Tea Bag Party is onto this? Then again, based on what I saw of 'The Daily Show' coverage of the Bags' recent convention in Hawaii, these 'patriots' are a little light in the brains department.
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THE LAST WORD: "The rich rule over the poor, and the borrower is slave to the lender." -- Proverbs (22:7).
