THIS JUST IN: The National Credit Union Administration plans to unload $50 billion of troubled MBS belonging to now-defunct "corporate" CUs. It's just a matter of how and when. Keep in mind that $50 billion is the "face value" of the bonds. How much these problem assets will fetch in the secondary market is unclear. For more details see the Monday edition of National Mortgage News. Don't subscribe? Call 800-221-1809...
Also in Monday's paper is an interesting story by Brian Collins on risk retention and the Dodd bill. If this "Friend of Angelo" (Dodd, not Collins) has his way and risk retention stays at 5% you can kiss the MBS market goodbye. Meanwhile, there's a Wall Street study saying that if risk retention doesn't get fixed mortgage rates will spike by 300 basis points. That's correct: 300 basis points...
Meanwhile, our affiliate publication, Asset Securitization Report, says American General Financial Services, a subsidiary of AIG, will be coming out with two deals backed by legacy mortgage assets within the next few weeks. AGFS is in the process of liquidating its $20 billion whole loan nonprime portfolio...
Distressed homes on the market in Orange County-once the home to many a subprime lender-were at a total of 2,795 as of late last week, representing 31.8% of the inventory, according to Steve Thomas of Altera Realty, who does a biweekly analysis of local home sales. This info comes courtesy of The Orange County Register...
Speaking of Southern California, Stearns Lending of Santa Ana soon will launch a correspondent program. Stearns is 20 years old. The company is a nonbank...
Who says the jumbo market is dead? In the new 4Q edition of the Alternative Products Quarterly Data Report, we list almost 30 active jumbo funders. To see a sample of the AP-QDR drop a line to
THE MAIN EVENT: Maybe we really are in an economic recovery. If anyone thinks all that federal "stimulus" money had nothing to do with the soaring stock market, well, then perhaps you can stop reading here. In two weeks the Department of Labor will release the latest unemployment numbers and economists, increasingly, are expecting quite a jump. We shall see. As we all know the mortgage market lives and dies by two things: jobs and low interest rates. Rates have done their job but if you've been looking at the yield on the 10-year Treasury the past week, it's closing in on 4%. Normally, 4% would be no big deals but we aren't in normal times. Home prices continue to sag-with some exceptions-and the more rates rise, the less likely certain home buyers will be to make the plunge. Yes, 2010 will not be a pretty year for originations but if your shop can make it through the year, 2011 hopefully will be brighter. Still, there are plenty of mixed signals out there. The loan "buyback" plague continues to stalk the industry, thanks to Fannie Mae and Freddie Mac. Meanwhile, plenty of lenders are getting smart and buying delinquent loans out of their GNMA pools. (More on this issue shortly.) Also, it appears that vendors that make their living off of servicing/delinquencies/REO services are doing just fine. One last thought: with the stock market soaring, investors should be feeling plush. Will they take some money off the table and put it into real estate? It's happened before...
DATA STUFF: The brand-new 4Q issue of the Quarterly Data Report is out. In it you can find information on a handful of fast-growing wholesalers based in California including Provident Funding, Sierra Pacific Mortgage and Stearns Lending. To order the QDR drop a line to
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THE LAST WORD: Irony: The White House wants to prevent "too big to fail" but keeps backing mortgage-related ideas that will result in the mega banks controlling the industry and killing the little guy. Go figure.
