THE MAIN EVENT: When it comes to mortgage banking, it's all about jobs folks. I know I might sound like a broken record on this topic but Friday was another one of those "this can't be happening" days in the stock market. By the time the gate closed, the Dow had plunged 323 points, sending the yield on the 10-year near its 52-week low. There's no point in rehashing the reasons for the carnage. You know what they are. But a few thoughts for you: We are in uncharted territory here. The good news for lenders (and I guess, servicers) is that mortgage rates are going nowhere any time soon. That's a given, but how do you, as a mortgage banker, profit from this? Loan applicants should be beating down your doors, hoping to refi. Is anyone funding a 4% 30-year FRM yet? (If so, drop me a line at
IN CASE YOU MISSED IT: National Mortgage News broke the news this past week that BB&T was exiting the wholesale channel. The week before we broke a story about GMAC re-entering wholesale. As for BB&T's exact plans, the bank was saying little this past week. Its wholesale unit is called Liberty Mortgage and it's unclear whether all those AEs are losing their jobs or will be morphed into correspondent account executives. One thing is clear, however, BB&T will be "cross-selling" its warehouse business along with correspondent, a smart move. If you have any insight, drop me an e-mail...
The GOP is trying to keep the heat on the White House regarding the future of Fannie Mae and Freddie Mac. In short, the party wants something done this year. Rep. Spencer Bachus, R-Ala., said the other day that 45% of respondents to a recent GOP poll voted to have the GSEs cut from the budget. The statement that Bachus released was poorly written, but the message translates into this: Voters say no more taxpayer money should go to Fannie and Freddie. To date, the two have cost the Treasury at least $145 billion and I would guess another $50 billion might be shelled out over the next eight quarters. (It's all guesswork on my part.) In short, no one knows how deep the hole is there. (And it doesn't help that the two are paying out dividends to Uncle Sam every quarter. It's sort of like moving government money from one pocket to the other.) But there is one academic question legislators need to ask: If you liquidate the GSEs today, selling all their assets at "market value" would you break even, lose money, or come out ahead? It's an unanswerable question. You can't liquidate Fannie and Freddie. How many buyers are there for $1.6 trillion in MBS and related assets? China, perhaps?...
OUR RESEARCH REVEALS: Roughly 98% of all loans originated in the first quarter were purchased by Fannie, Freddie and Ginnie Mae. Although some members of Congress would like to terminate the triplets, it would be impossible until the private sector begins to lend again and that is at least three years away, says one blogger...
MEDIA NOTES: "The Housing Scene," the syndicated column by National Mortgage News' own Lew Sichelman, has earned a second place finish in the Best Column category in the annual journalism competition sponsored by the National Association of Real Estate Editors. (In case you're wondering, I finished first. Just kidding. I'm not a member because I'd never join any club that would have me as a member.) Sichelman, our senior housing correspondent, has been writing his column since 1978.
WASHINGTON NEWS: NMN's Brian Collins reports that The House of Representatives is expected to vote on and pass a bill during the week of June 7 that will give the Federal Housing Administration more flexibility in adjusting its mortgage insurance premium structure and rebuild its capital reserves. The FHA reform bill (H.R. 5072) also strengthens the agency's hand in getting lenders to indemnify FHA for bad loans and to terminate lenders with excessive early default rates. The House Financial Services Committee approved the bill by a voice vote in April after rejecting (by a 52-12 vote) an amendment by Rep. Scott Garrett, R-N.J., to increase the FHA 3.5% minimum downpayment to 5%.
OTHER VOICES: Former NMN ad salesman James "Izzy" Hollander still keeps his eye on the mortgage market (but only as it pertains to his home in Brooklyn). He would like to sell his tony co-op and move to the fresh air of Hudson Valley but family members prefer the culture of New York. Anyway, Jim (whose sales beat was the former subprime Mecca of Orange County) continues to write a blog where he rails against everything that bugs him, which is everything. His work can be found at
DATA STUFF: The brand-new edition of NMN's Annual Data Report is out. In the ADR you can find rankings on the top 100 lenders and servicers in 2009 with complete breakdowns on production channels and subservicing and subprime servicing. To order the ADR drop a line to
SURVEY NOTICE No. 1: Our annual "Top Producer Survey" (a k a LO survey) is still available at
SURVEY NOTICE No. 2: It's survey time once again for sellers and servicers. Look for our annual survey in your computer mailbox or e-mail
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DATA NOTICE: National Mortgage News has all different data sets available for purchase including rankings and contact lists on the nation's top lenders and servicers. Send your requests for information to
THE LAST WORD: Hats off to Detroit Tigers pitcher Armando Galarraga who threw a perfect game Wednesday night but didn't get credit for it because the ump at first made a bad call. But Galarraga just smiled. He looked relieved. And he didn't throw a fit like some professional athletes would. That's what I would call class. We need more of that in pro sports.
