The Future of Mortgage Banking is Now


First off, I’d like to thank the crew at Bank of America for continually giving mortgage reporters and editors something to write about. Don’t get me wrong–there’s plenty of good stories out there. And let’s face it–and you read it here first: What happens regulatory and legislatively over the next three to four years should shape the future of this industry for the next 50 years. What’s interesting about this prediction is that I’m not convinced (in the least) that it will matter one bit whether a Republican or Democrat occupies the White House. The writing is on the wall regarding Fannie Mae and Freddie Mac. My guess is that just one will survive (with a new name) and going forward it will function as a guarantor much like GNMA

As for B of A, well, what can we say? When it comes to news, it’s the gift that keeps on giving. This past summer and fall we began hearing rumors that Fannie had threatened (earlier in the year) to cut the bank off unless it stepped up its quality control efforts on new originations. Well, the bank complied, which jammed up its loan processing. Then, one by one, the dominoes fell at B of A: top-performing loan officers departed en masse, and then the bank threw its correspondent and warehouse units overboard. Technically, its warehouse unit is now over at Merrill Lynch but I know a handful of warehouse competitors that are aggressively courting those clients. You might as well cross warehouse lending off the B of A mortgage menu as well. Then on Thursday afternoon B of A turned the tables on Fannie, revealing that it would no longer sell purchase money loans to Fannie. How important is this? Answer: B of A is only Fannie’s second largest customer. But shrinking like a dried-out sponge (OK, I couldn’t come up with any good metaphors on Friday afternoon)…

Internally, some B of A loan officers are starting to refer to the bank’s mortgage business as “The Titanic”…

PREDICTION: By the fourth quarter B of A will rank 10th in originations compared to fourth now. For a complete ranking of the top 100 email

In an upcoming issue of National Mortgage News we will publish a list of the top sellers to the GSEs. For an online and print subscription call 800-221-1809

THE OCWEN WAY: First India, now the Cayman Islands. As you read in NMN last week, a large chunk of Ocwen‘s back-office work force is housed overseas in India where they pay mortgage workers one-eighth of what their equivalents earn in the U.S. Meanwhile, the folks who brought you Ocwen filed an amended S-1 on an affiliated firm called Home Loan Servicing Solutions, which plans to buy MSRs in the open market. It will also buy product from Ocwen. HLSS will be headquartered in the Cayman Islands. Why, you might ask? Answer: The Caymans does not currently levy income taxes on individuals or companies. Sweet. (Note: One of our free competitors totally botched this story and was quite late to the Fannie-B of A story. Time to come home to NMN.)

This past week several NMN staffers were in Orlando at the MBA servicing show, covering key players in the servicing and default management market, including SWBC, Cenlar, GCC Servicing Systems, ServiceLink, Wingspan, Safeguard, Specialty Servicing Solutions, Urban Lending, First American, MCS, Quantum, Qualified Custom Solutions, Loan Protector, Five Brothers, U.S. Default Management, REO Allegiance, and others.

WASHINGTON NEWS: The Department of Housing and Urban Development this week reissued a proposed rule that would reduce by half the maximum allowable seller concessions in an FHA loan transaction to 3%. Currently, the Federal Housing Administration allows sellers to kick in 6% of the sales price to cover the buyer’s closing costs, discount points and upfront premiums. (Reporting by NMN‘s Brian Collins.)

LOAN OFFICERS, BRAG A LITTLE: NMN and its sister publication Origination News, the most widely led news magazine in the broker/correspondent sector, has launched its annual loan officer survey. Eventually, we’ll publish features and rankings on the nation’s top LOs. To participate in our survey visit

DATA STUFF: If you need a list of the nation’s top subservicers ranked by receivables, subservicing or delinquencies drop an email to and ask about our Quarterly Data Report. It’s a 50-page Excel spreadsheet. Also check out our exclusive mortgage data website:

MUST ATTEND MORTGAGE SHOWS: From April 17-19 National Mortgage News and SourceMedia will hold their annual Mortgage Servicing Conference at the Omni Mandalay Hotel in Irving, Texas. For more information see the ads on our website or email or click here

I’m on Twitter, discussing mortgage matters, baseball, soccer and the end of the East Coast skiing season.

LAST WORD: Caught some of the GOP debates on CNN. The most sincere candidate so far: Ron Paul.

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