Fannie Mae has purposely kept its mouth shut regarding its investment in servicing rights - especially its $74 billion MSR purchase from Bank of America this past fall which cost the GSE about 50 basis points. But its days of being super secretive may be coming to an end.
Apple co-founder Steve Jobs revolutionized the computer, phone and music industries. But mortgage banking? Okay, so Apple (from what we know) has no designs on mortgage banking, but it's interesting to think about it because the inventor of the iPhone/iTouch/iPad and other gadgets is sitting on roughly $100 billion of cash and securities.
Recently, we called a trader of nonperforming loans who said quickly, "Can't talk right now. Way too busy." Later on we finally spoke and the message delivered was quite clear: the market for underperforming and nonperforming mortgages appears to be gathering steam.
First things first: Yes, I can live on $500,000. Heck, I can live on $250,000 a year. Would I like to run Fannie Mae, the government-controlled mortgage giant? Answer: Sure, why not? But first I have a few stipulations.
Perhaps, banks that have been exiting the residential finance space will look really stupid if housing and mortgages recover. Figures released Thursday suggest that delinquencies are falling but a huge overhang of foreclosures is on the way. Corporate earnings are at record levels, employment is rising, and just maybe, maybe housing is on the mend. But a huge stumbling block remains: ultra tight underwriting standards.
Last summer when MetLife revealed that it would sell its "forward" mortgage business the company did something smart for its workers: it paid for its loan officers to take classes and obtain their state licenses.
Politicians - including those in the White House - continue to jawbone about how the private sector needs to step up and create a whole new securitization market that some day will replace Fannie Mae and Freddie Mac. This effort - supposedly - starts with the safest non GSE product out there: jumbo loans where well-heeled borrowers put down (say) 10% and are so filthy rich that their chance of default is next to nil.
Interactive Mortgage Advisors is offering a $4.5 billion MSR package with another $1 billion in the works. Phoenix Capital is peddling $35 billion of MSRs for Bank of America - with more on that way.
Larry Fink, chairman and CEO of BlackRock Financial, is nobody's fool - not by a long shot. He cut his teeth at First Boston many moons ago, helped shape the MBS market, and then went on to create a financial services powerhouse: BlackRock
Will Clint Eastwood walk through the streets of Minneapolis, proclaiming how the U.S. mortgage industry is back? If you're not sure what I'm talking about, go see last weekend's Chrysler/Fiat commercial during the Super Bowl. (As an aside, I think the whole political take on that commercial has been blown way out of proportion.)
Early Wednesday afternoon it appeared that New York and California would not be part of the 'robo-signing' deal and then - from what we're told - the White House put the full court press on the two, laying out the political ramifications for these two very Democratic states.
PennyMac released 4Q earnings this morning and the big news wasn't its profit - which was decent - but the fact that it bought almost $1 billion of mortgages from other lenders via the correspondent channel.
Yes, thousands of consumers have been wronged by residential servicers that cut corners on their foreclosure paperwork and decided to 'robo' away their workload. But does a consumer who was in arrears deserve to get his house back? It's a question the general media has yet to ask and at the same time it's a difficult question.
The White House's restructuring of the U.S. auto industry appears to have worked - for now. If you saw yesterday's Super Bowl you witnessed an awe inspiring commercial from Chrysler featuring everyone's favorite 'punk' killer Harry Callahan, a.k.a. Walt Kowalski, a.k.a. Clint Eastwood.
Wholesale lending is back! OK, not exactly. Citigroup announced its exit from the channel this past week and some trade journals - not knowing their stuff - seemed to think it was the biggest story since the Hindenburg disaster. Wholesale only accounted for 9% of Citi's production.
