The State of the Mortgage Union

I watched the State of the Union speech Tuesday and came away thinking no real “mortgage” surprises tonight except for two: Obama not using the word “mortgage broker” once, and the formation of the DOJ fraud task force on securitizing loans. But what about the “The State of the Mortgage Union”? Here goes: Thanks to low rates and a promise by the Federal Reserve never to raise rates again (I’m joking but you get the message) mortgage bankers should have a decent year in 2012. Unlike some mortgage experts I’m not forecasting a bad year for the industry—nor will it be a barnburner either. For small- to medium-size lenders with growth in mind the exit of MetLife from the business and Bank of America‘s “scale back” means there should be enough opportunity for companies that decide to seize it. (The operative phrase here is “seize.”) Marketing and outreach will be key. The “bad” news is the task force. There’s no doubt among residential lending professionals that the regulatory pendulum has swung too far the other way. The new task will focus on the sins of the past—in particular all the private-label MBS crap that Wall Street financed through warehouse lines and sold to suckers on the other end. Well guess what? The pigeons didn’t care because they (we) all believed that home prices would keep rising 20% a year and home equity would bail out bad underwriting. Did any of the traders on Wall Street, their sales guys, managing directors and quants break the law? Good luck proving any of that to a jury. The most egregious Wall Street subprime case—U.S. v. Bear Stearns—went down in acquittal two years back because the damn U.S. prosecutor couldn’t tell the jury how two bear honchos sold their stock in a subprime hedge fund (insider trading) and left everyone else hanging. (Read “Chain of Blame.”) This was a slam-dunk case for the government and they blew it. Who in their right mind thinks Obama’s MBS task force co-chair appointee, New York attorney general Eric Schneiderman, will have any better luck? Come on White House and Democrats, get off it already. Having no underwriting standards is just plain dumb, but it’s not a crime. There were thousands of crimes committed at the retail loan officer level (Ameriquest comes to mind) but there’s not enough jail space for all the “little guys.” Lesson learned. Wall Street will never securitize poorly underwritten BC loans again. Move on and do something to let the market heal like this: Place a ban on all GSE buybacks after two years have passed. Fannie Mae and Freddie Mac shouldn’t have the right to put-back loans that were funded three years ago. Also, should the GSEs be putting performing loans under the microscope too? When does it all end?…

Something I learned this past week: “loan broker” is a pejorative word. Mortgage broker is not. Go figure…

The National Association of Independent Housing Professionals met with CFPB chief Richard Cordray this past week. From what we’re told it was a “good working meeting.” More to come next week…

As we all know Wells Fargo is the king of mortgage banking. It has a 40% GNMA MBS market share and a loan production share north of 30%. Top-ranked FHA lenders include Wells (of course), B of A U.S. Bank Home Mortgage, PHH and many more. For a complete ranking see the Quarterly Data Report. For a sample drop an email to Deartra.Todd@SourceMedia.com…

We understand Aurora Loan Services is still working on a $900 million nonperforming loan auction. Details to follow…

Hey, what ever happened to EverBank‘s initial public offering? HLSS?…

Is former American Home Mortgage (Melville, N.Y.) CEO Michael Strauss back in the business as a recovery and forensic audit expert?…

A WORLD AWASH IN CASH: Worldwide, corporations now hold $4.2 trillion in cash, up 5% from a year earlier. Now, what are they going to do with all that money?

THE NEWT GINRICH QUESTION: OK, what exactly did Newt Gingrich do to earn the $25,000 a month retainer he received from Freddie Mac? Drop me a line at Paul.Muolo@SourceMedia.com. Serious inquiries only.

Is Genworth in the reverse lending business?…

WASHINGTON NEWS: Raising guarantee fees on GSE loans (again) could be a disaster for the industry, so says the Mortgage Bankers Association, National Association of Home Builders and National of Realtors. The three trade groups are lobbying elected officials to find new ways of funding a 10-month extension of the payroll tax holiday. Reporting by NMN‘s Brian Collins.

If you need a list of the nation’s top-ranked jumbo funders check out the Alternative Products Quarterly Data Report. For a sample of this Excel spreadsheet drop a line to Deartra.Todd@SourceMedia.com. Dee is cutting deals on data sales…

DATA STUFF: If you need a list of the nation’s top wholesale and correspondent funders drop an email to Deartra.Todd@SourceMedia.com and ask about our Quarterly Data Report. It’s a 50-page Excel spreadsheet. Also check out our exclusive mortgage data website: MortgageStats.com.

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 click here http://www.nationalmortgagenews.com/conferences/ms/.

I’m on Twitter, discussing mortgage matters, my book in progress and the Oscar nominations. (Nick Nolte.)

LAST WORD: Facebook may go public in the coming week. My advice: short this stock. As for the New York “Football” Giants, their destiny awaits.

Article source: http://www.nationalmortgagenews.com/blogs/hearing/the-state-mortgage-union-1028562-1.html

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