Was Thornburg a good lender who was merely subject to a short-term credit crunch? Or was there foul play?
Thornburg
Below are two notable items on this slow news day, as well as a primer on how mortgage banks lock loans and hedge risk. (1) The bankruptcy trustee for Thornburg Mortgage sued Goldman, Barclays and other big banks for a combined $2.2 billion, blaming them for its bankruptcy. Meanwhile, former Thornburg CEO Larry Goldstone is
FHA Commissioner David Stevens resigned Thursday and will vacate his post end-of-April. Former mortgage banker Stevens stepped in July 2009 and helmed the FHA during a tricky time: FHA-insured home loans were jolted back into relevance when Congress drastically increased FHA loan limits to (regional caps of) $729,750. But this increase happened in a crisis
Moody’s Cuts Greece To Junk Moody’s cut Greece’s credit ratings to junk status (Ba1). Greece has been downgraded to non investment grade and Spain cannot seem to find any funding to rescue its savings banks. Of course, the rate on any fixed income security tied to Europe has gone up to compensate investors for the
Update on State & National Mortgage Licensing The SAFE Act continues to weigh on some agents’ minds. Different states have different interpretations. In general, the SAFE Act requires all mortgage loan officer license applicants to complete 20 hours of pre-license education, including three hours of federal law and regulations, three hours of ethics, including fraud,
Jargon Watch I had my standard “beginning of the year” meeting with the family. My soon-to-be 18-yr old son reported that this time in his life is “unprecedented” for him, and that he is working on his “exit strategy” from high school. He then said that this would be an “historic opportunity” for me to
The former Atlanta quarterback Michael Vick has left the federal prison to attend a hearing in Virginia. He said that prison has completely changed him. It’s true … he’s more of a cat person now. Thornburg Bankruptcy Thornburg Mortgage, long thought of as good lender for “make sense” deals, announced that a consortium of investments
Prepayment Effects On Rates One of the things that impacts the value of servicing is the length of time that the company servicing the loan (i.e., collecting the payments) expects to have the loan on their books. No one wants to pay a 2 or 3 point premium for a loan that they service for
Good Luck on Rate Locks As I was getting ready to water down my kid’s milk yesterday (hey, things are tough, and no one is immune!) an agent called and wondered, “What is with all the late afternoon re-pricing for the worse?” Investors will change prices for any number of reasons. No one denies that
When I was a kid, boy bands wrote songs about girls, cars, and school. Well, I guess the times have changed. This one, from Isaac Hollingsworth, comes from the son of a principal in a mortgage-related recruiting firm. State of Mortgage Banking/Brokering Where are the investors going? How about, “Away”? A good-sized, relatively well capitalized
The analysis of Fannie & Freddie’s plan for forestalling foreclosures continues. As one astute loan agent quipped, “All I have to do is stop making mortgage payments and I can get a 3% rate?? Sweet! Who needs a mortgage broker!” Speaking of Freddie, they announced a 3rd quarter loss of $25.3 billion, and the company
If you want a mortgage in Hungary, you’d better hurry! Their central bank deputy governor said that Hungary needs to tighten rules for mortgage loans combined with unit-linked insurance products, to reduce risks in the financial sector. Interestingly, not only are Hungarian banks predominantly owned by foreign banks, but only 30% of homes are mortgaged.
Do you think that licensing is not an option for a loan originator? Think again, and view this. This SAFE licensing became part of HR 3221, signed by President Bush at the end of July. Remember that it is federal law, but states have some time to pass state legislation to license originators. (As best
Quick history lesson If one looks at previous financial crises, one sees that they generally last longer than one year. Whether it was the Great Depression (1929-1941), the Japanese banking crisis (1990-1999), our S&L crisis (1986-1995), or the Asian Banking crisis (1998-2000), these things take time to work themselves out. People who are accustomed to
GMAC will cut 5,000 jobs (60% of its employees) at Residential Capital, and shut its 200 GMAC Mortgage retail offices. Announcements went out saying that, in spite of eliminating their retail and wholesale channels: GMAC is committed to maintaining and growing the Correspondent Channel, supported by the Warehouse Division. The Conduit is actively buying loans
(If you only want to read good news, skip to another paragraph.) It appears that, as the summer winds down, mortgage agents and brokers are taking a look at their pipelines. It seems that at many originators, a strong a June & July has been followed by a slightly weak August, funding-wise. Locks are generally
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