National Mortgage News reports that Countrywide received an additional $12 Billion in secured financing and that mortgage powerhouse, WaMu, is exiting the warehouse biz. In addition, there are rumblings that Countrywide employees may be suing Angelo Mozillo et. al, complaining that the company allegedly cheated them out of millions by concealing the true health of Countrywide. Inman News is reporting that First Horizon Home Loans is shuttering offices and reducing staff.
Lots of shifting, merging, consolidation, BK’s, and movement going on the the real estate business as this slowdown works through different areas of the country. I would like some insiders to comment on how WaMu’s exiting of the warehouse business will affect loan officers and their customers.
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16 responses so far ↓
1
UrbanArtist
// Sep 13, 2007 at 2:55 pm
Country wide is not the only one on the hot seat. So is American Home Morgage.
http://online.wsj.com/article/SB118955540976824460.html?mod=hpp_us_whats_news
2
Shawn
// Sep 13, 2007 at 3:06 pm
Hi BubbleBuyer,
you can wear a tin cap, but can you explain what motive I would have in coming here to make up a story about my rent going up? Gosh. Maybe you are pretending to be someone or something you are not. Do you notice that I don’t use a handle? I use my “real” name. Do you? I do have a job interview in Minneapolis, they are scheduling the interview right now. I speak the truth about my life and my feelings about the housing bubble in Seattle, Los Angeles and the USA.
3
UrbanArtist
// Sep 13, 2007 at 4:04 pm
This article is not directly related to Seattle but I thought it had some information worth noting. Plus I do not think Seattle is going to be able to continue thinking they can avoid what is around the corner. I’m not a dooms day kind of person or a conspriracy type, but fundamentals can not be ignored for long without a big correction.http://www.marketoracle.co.uk/Article2098.html
4
BubbleBuyer
// Sep 13, 2007 at 5:10 pm
uuuhhmmm what?
I think you have me confused with someone else. I was refering to the person implying you were part of a conspiracy to brainwhash people into thinking rents were going up. I know they are going up because I moved here from Los Angeles to avoid ridiculous rent increases by my landlord.
“Shawn said,
on September 13th, 2007 at 3:06 pm
Hi BubbleBuyer,
you can wear a tin cap, but can you explain what motive I would have in coming here to make up a story about my rent going up? Gosh. Maybe you are pretending to be someone or something you are not. Do you notice that I don’t use a handle? I use my “real” name. Do you? I do have a job interview in Minneapolis, they are scheduling the interview right now. I speak the truth about my life and my feelings about the housing bubble in Seattle, Los Angeles and the USA.”
5
helium3
// Sep 13, 2007 at 9:41 pm
Uhhh . . . what does it mean that WaMu is exiting the warehousing biz?
6
Rhonda Porter
// Sep 14, 2007 at 6:38 am
WaMu exiting the warehousing business means that they are no longer offering lines of credit to mortgage brokers.
I’ve had a theory that some of these big banks are using these times to try to narrow down their competion: eliminate the mortgage broker.
My husband has been saying I’m being paranoid, but he sent me this article yesterday and said that maybe I’m right….
http://www.latimes.com/business/la-fi-wamu13sep13,1,2123571.story?ctrack=1&cset=true
7
greater context
// Sep 14, 2007 at 8:09 am
as far as i can see, the broker served no purpose in the first place, except to help people get into loans that are bad for the lender and the lendee but pay a nice big comission for the broker.
i’m glad they are going away.
8
uptown
// Sep 14, 2007 at 8:37 am
I agree with Rhonda, so it’s a good time to pick up some cheap bank stocks. BTW on one story, I thought I heard them say that WaMu is also hiring 1,000 people, as well as laying off 1,000 in the mortgage side.
9
An observer. . .
// Sep 14, 2007 at 9:19 am
No surprise- a normal pattern- in an industry downturn, the strong gain share and the weak fail. WAMU is acting in an entirely rational fashion- the 1000 being let go are warehouse-line people; the 1000 being hired are retail loan origination people. No need to support the poorly funded mtg company when you can eliminate them and take their business. . .
Besides most little mortgage companies using “warehouse” lines from banks like WAMU are only doing so so that they can “close loans in their own name” (before selling them to the Bank anyway.) This lets them avoid disclosure of “back-end” yield spread premiums and results in poorer information to borrowers. It’s kind of a sleazy corner of the business anyway, and I’m sort of glad to see the Bank getting out of it.
10
An observer. . .
// Sep 14, 2007 at 9:28 am
One additional comment- the people using warehouse lines are the ones calling themselves “mortgage bankers”. True “mortgage brokers” (often decried in the industry as “bucket shops”) actually do “broker” loans, and do have to disclose all compensation they get- including that paid to them by the “lender”.
11
S-Crow
// Sep 14, 2007 at 10:44 am
Thanks for the feedback. I hope that clarifies a bit of how companies are structured.
I’m reading that WaMu is also closing down it’s Anaheim office of Long Beach Mortgage (sub-prime) and laying off all staff over the next two months.
12
Rhonda Porter
// Sep 15, 2007 at 7:51 am
Brokers provide more competition and I’m a believer that competition is a good thing. What if you have had 3 giant mortgage-banks to work with for your home finance or banking needs?
13
Angie
// Sep 15, 2007 at 9:17 am
What if you have had 3 giant mortgage-banks to work with for your home finance or banking needs?
I’d still have my mortgages with my beloved credit union.
It’s not the absolute rock-bottom rate (generally 1/8 of a point higher than WaMu when we’ve compared). But the customer service when our mortgages were held by WaMu and Chase were so completely egregious that I do not trust them with the money pertaining to the roof over my head.
WaMu totally f’d up handling our homeowner’s insurance, nearly causing it to be cancelled. Chase responded inappropriately to simple questions and (par for the course these days) had policies structured to make it easy to screw up and be held liable for massive fees. We never did trip up and get stung, but the principle of that approach makes me want to have nothing to do with them.
Our CU holds all notes, knows us as individuals, values our longtime membership, and structures its policies fairly, not predatorially. No contest.
14
Rhonda Porter
// Sep 15, 2007 at 10:48 am
Credit unions can be a great option. Sometimes they have great rates and as you mention, Angie, sometimes not as competitive. Their products are also limited compared to what may be offered at a mortgage brokerage.
15
Angie
// Sep 15, 2007 at 3:06 pm
Limited is OK with me—I like a boring mortgage. ;)
When I go to my CU’s web site, the list of available options for mortgage financing is about as long as my arm, so it seems pretty flexible.
Lastly, one thing I like about my CU is that it’s a statewide institution (Washington State Employees CU), so the money is staying in-state and working for/employing people here. I suppose that’s more or less true for WaMu, as well, but with Chase I’m sure the people on the end of the customer service line were halfway across the globe.
16
Shawn
// Sep 16, 2007 at 12:43 am
BubbleBuyer,
sorry.
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