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:

(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 [...]

Thornburg reported earnings yesterday and here are the results:

Where we left off with Thornburg on August 8, the message from Thornburg insiders was “stay tuned for the end of August.” We’re nearing that time, and according to a press release yesterday, it seems the company might be coming out of the woods. A writer for independent investor site SeekingAlpha summarized the very complex [...]

A few weeks ago Thornburg Mortgage began an exchange offer for four classes of its preferred stock, as part of its efforts to remain in business. (Preferred stock holders would receive $5 in cash and 3.5 shares of common stock for each share of preferred stock tendered by August 20th.) The exchange offer is being [...]

TREASURIES UP AS FANNIE/FREDDIE FREEFALL Yesterday shares of Fannie Mae and Freddie Mac both plummeted after an analyst with Lehman Brothers wrote in a report that the two companies may need to raise billions of dollars if accounting rules (FAS 140) are changed. Most experts feel that they will not have to come up with [...]