THIS JUST IN: It's no secret that GMAC inked a deal with Freddie Mac a few months back to settle a large chunk of its mortgage buyback problems. No details were disclosed (of course) but one number we heard was $600 million. I'm not sure if that's how much GMAC/Residential Capital Corp. paid or bought back. No one is talking at these companies (because loose lips sink ships, I guess). But we do know this: Uncle Sam doesn't want to hold onto its 50%-plus stake in the firm forever. Even though many mortgage bankers keep telling me that President Obama is a dyed-in-the-wool socialist, he really doesn't want the government in this business. And we all know that selling ResCap this year as a standalone is not going to happen. A few investment bankers I've been talking to think the plan is this: Take the FDIC-backed bank (Ally), mush it together with ResCap and whatever financial service bank-like assets there are at GMAC, and take the thing public—this year. I mean, if General Motors can go public again (it's in the works), why not GMAC/ResCap/Ally? If you have any insight, drop me a line at
By the way, if you listen to the Ally radio and TV commercials, the bank's name sounds like "Allied," not the name, Ally, as in the baseball great, Allie Reynolds. Go figure...
Spanish bank Banco Santander apparently passed the European "stress test" that regulators put the company under. I only mention this because Santander owns Sovereign Bank of Pennsylvania, a residential and warehouse lender. We assume that Sovereign is still wedded to those businesses. If you hear anything otherwise drop me a line...
Meanwhile, in Monday's National Mortgage News we report on certain loan officers who are leaving the megabanks (Bank of America, Wells Fargo) because it takes the big boys so long to close a loan. The full story is in the paper edition. Here's one late breaking piece of intelligence about the situation. (The LO did not want to be identified): "I've spent the bulk of my career in wholesale lending, but recently took a break and spent six months as a sales manager at Wells Fargo Home Loans. The branch I worked out of employed 16 loan consultants when I started and had 7 remaining when I left. The branch manager (Wells Fargo originating manager) even left after 14 years. Most of the consultants received on average 23-35 basis points. The processing at the fulfillment center was frankly an embarrassment. The underwriting/processing took from 4-6 weeks even though volume was not heavy at the time. I definitely see more and more of the top originating consultants looking at the mortgage banker model"...
It appears that Harvard professional Elizabeth Warren is a shoe-in to head the new Consumer Financial Protection Bureau. (I'm a Yale man, myself.) But let's not forget what she wrote back in 2007 about loan brokers. She seems to hang the whole housing bubble on brokers and not the true villains in this mess: Wall Street. Here's what she penned about when a homebuyer calls a loan broker: "When they call a mortgage broker, they may believe they will receive wise advice that will guide them through a dangerous thicket. Some mortgage brokers will do just that. But consumers are just as likely to encounter a broker who is working only for himself, taking what amounts to a bribe from a mortgage company to steer a family into a higher-priced mortgage than it could qualify for, all the while assuring the family that this is the best possible deal. For example, a family that might qualify for a 6.5% fixed-rate, 30-year mortgage could easily end up with a 9.5% mortgage because the broker can pocket a fee (what the industry calls a "yield service premium," or YSP) from the mortgage company to place the higher-priced loan. High YSPs helped drive the wild selling that led to the recent meltdown in the subprime mortgage market"...
MORTGAGE PEOPLE: The Treasury Department said it would not pick Julie Williams, the No. 2 at the Office of the Comptroller of the Currency, to serve as acting head of the agency when John Dugan leaves in August. Instead, the agency will pick John Walsh, currently the agency's chief of staff, for the job. Kevin Wakey, a public relations official for Wells Fargo Home Mortgage has left the building.
DATA STUFF: As I noted recently, the 1Q edition of the Quarterly Data Report is now out. (We are now busy working on the 2Q edition.) The QDR provides industrywide composite data on loan production and servicing and specific figures on the top 100, including delinquencies. A new feature for the QDR is our ranking of the nation's top FHA lenders. If you're looking for jumbo production numbers try the Alternative Products Quarterly Data Report. For more info on both drop an e-mail to
OUR RESEARCH REVEALS: Lenders saw loan production fall by 30% in 2Q. We are still collecting surveys from funders. If you would like to give us your origination numbers drop a line to
FINAL SURVEY NOTICE: We're wrapping up our annual lending and servicing survey. NMN is still looking for information on active lenders and servicers, regardless of size or charter. If you would like to complete a simple one-page survey drop a line to
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THE LAST WORD: "If there is hope, it lies in the proles." - Winston from George Orwell's book "1984." (Of course, the proles could use a job.)
