Mortgage Blogs

What We're Hearing

October 23, 2009

By Paul Muolo

What is it with Long Island, any way? It's the home of Joey Buttafuoco and Amy Fisher. (Remember them?) You ever hear of the Good Rats? The parking lot that is called the Long Island Expressway? And don't get me started on the real estate taxes! Twenty-five years ago I remember visiting with my mom's boss (a Sears manager) at his house on the water. Back then his taxes were $10,000 a year. I grew up in Nassau County, the South Shore where all the working class folks lived. (Billy Joel and all the rich folks live on the North Shore.) I was raised in a Levitt house that cost my parents about $9,000. My dad was a GI returning from the war. He would regale me with tales of his 3% FHA loan. OK, he didn't regale me but I do remember that my parents had an FHA mortgage and the rate was about 3%. (This was back in the 1950s.) Where am I going with all this? FHA and Long Island? Lend America, that's where. The nonbank from Melville was in the news this past week after it beat back a court injunction from HUD that would've prevented the lender from continuing to fund FHA loans. (FHA is its only product so you can imagine how important it is to them.) For now, Lend America is still open and operating and that's good news for its 700 employees. Is this just a case of a misunderstood businessman (Michael Ashley) and an overzealous HUD looking to make an example of someone (Ashley) over $14 million in loans? (Ashley, by the way, has a bit of a "history" but that was almost 20 years ago.) The matter is far from over. The judge wants to see more evidence from the government. As part of its case, Lend America filed an affidavit from Scott Rasmussen, its chief performance officer. He's worked at the company for less than two years and says (in the filing) that since early 2009 its product process is entirely paperless which results in "significantly increased control and accountability." He adds that the company can tell "exactly when any document or records have been altered." (Its software vendor in this regard is Interthinx.) This, I assume, speaks to loan quality at the firm. The Lend America case is going to be one to watch. For the full story see the Monday (paper) edition of National Mortgage News. Don't subscribe? Call 800-221-1809...

Why do we spend so much time on FHA matters? As NMN's Brian Collins reports on our website: For the first time in decades, Ginnie Mae is outpacing Freddie Mac in the issuance of mortgage-backed securities...

We never reported it but Gateway Bank of San Francisco, a warehouse lender, got hit with a cease-and-desist order from the Office of Thrift Supervision. The C&D (available on the OTS website) is pretty vague. A spokesman for the agency declined to comment on the matter. As one blogger noted: "Warehouse lenders carefully watch the financial health of their mortgage banker customers. Hopefully, mortgage banks do the same"...

Retail production - as a percentage of all loans funded - fell to 46.5% in the second quarter, according to the Quarterly Data Report, NMN's premier data publication. In the first quarter the ratio was slightly higher. Retail was as high as 51% of production in 1Q08. For a sample copy of the QDR e-mail Dearta.Todd@SourceMedia.com...

England's dreaming: so you thought the U.K. economy was coming back, did you? Not so fast. Our former rulers across the pond reported a sixth consecutive quarterly fall in GDP. It's a good thing most U.S. lenders have pulled out of the market - most except our friends at General Electric, the owners of CNBC. And wasn't it CNBC's stock picker James Cramer who several months back said U.S. stocks were headed south? It was...

PennyMac, the publicly traded mortgage vulture fund, saw its stock fall to $18.91 on Friday, a few pennies above its 52-week low. I assume its 3Q earnings should be out soon...

Jim Israel, a former National Mortgage News ad salesman, writes the amusing and sometimes poignant "Mr. Gripes" column. In his most recent blog he notes: "After observing Alan Greenspan testifying before a Senate committee a couple of months ago, I finally pinned down the character defect that very nearly brought down the American economy: he is a man who does not take counsel from anyone kindly - he listens only to himself. Hubris, the Greeks call it."...

UPCOMING IMPORTANT INDUSTRY MEETINGS : In November NMN and SourceMedia will be holding a loan modification show in Dallas. For more details e-mail Julie.Dienes@SourceMedia.com or visit http://www.sourcemediaconferences.com/TMS09/index.html. All the movers and shakers in the loan mod business will be there.

WASHINGTON NEWS: In passing a Consumer Financial Protection Agency bill this past week, the House Financial Services Committee decided to shield mortgage and title insurers from the reach of the proposed consumer regulatory agency.

DATA NOTICE No. 1: Need soup-to-nuts statistics on the nation's top residential (and commercial) lenders and servicers? The new MortgageStats.com data product is ready. The user-friendly M-Stats is Web-based and incorporates both the Quarterly Data Report and our annual Mortgage Industry Directory. Among other things, it has annual rankings on the top 400 lenders and servicers, including breakdowns on retail, wholesale and correspondent - and news archives. There's contact info, too, and plenty of data on servicing. And here's the best part: you get quarterly updates. To see a sample send an e-mail to Delores.Stokes@SourceMedia.com or Deartra.Todd@SourceMedia.com. Site licenses are available.

DATA NOTICE No. 2: Even though we offer MortgageStats.com you can still subscribe to the Quarterly Data Report and Alternative Products QDR, spreadsheet products that provide readers with quarterly rankings on the nation's top lenders and servicers. There's also a companion product called the "Midyear Data Report" which offers half-year rankings on lenders, servicers and more. There is an Alt-QDR version of this as well. Again, shoot an e-mail to Deartra.Todd@SourceMedia.com.

EDITORIAL NOTE: The Washington bureau of NMN has moved to Northern Virginia which means there are new telephone numbers for our staff. Executive editor Paul Muolo can be reached at 571-403-3851, bureau chief Brian Collins at 571-403-3837, Andras Malatinszky, director of online products at 571-403-3862, and Deartra Todd, data collection and sales at 571-403-3859. The mailing address is 4401 Wilson Blvd. Suite 910/ Arlington, VA 22203.

THE LAST WORD: Go Angels! The curse of Citifield lives on - but that's in Queens not up in the Bronx where the Phils (assuredly) will meet the Yanks? Citizens Park vs. Bank of America? (The rumor was that BoA wanted the naming rights to Yankee Stadium.) What Citi and BoA have in common: both are TARP hogs.

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