GLG News by Title Insurance Experts: Mortgage Professionals

Joseph SmithPresident and CEODefault Mitigation Management

What will the FED do next, what is left for them?

March 18, 2008

Analysis of:Fed Aggressive on Financial Front | money.aol.com

The Fed does not know what to do after they reduce interest tomorrow. This follows on the tail of the bailout of Bear Sterns in a sweet heart deal with JP Morgan/ Chase, and the opening of the FED window to non-depositories. The next issue and crisis is going to be the dollar value and its impact on the economy. Gas is going to continue up as will most other costs that are fuel dependent. What will be the impact as a G-7 goes off the dollar and say to the EURO?

Joseph SmithPresident and CEODefault Mitigation Management

That did not take long - Bear Sterns use of FED bailout

March 14, 2008

Analysis of:Bear Credit Woes Send Stocks Lower | money.aol.com

1. Market reacts to Bear liquidity and FED temporary bailout plan by dropping over 200 points. 2. Will market continue to yo-yo as these events happen. 3. Will FED change plan if Bear fails?

Joseph SmithPresident and CEODefault Mitigation Management

When will they learn?

March 12, 2008

Analysis of:Stock Futures Pare Early Gains | money.aol.com

How afraid is the FED of where the economy is going that has caused them to promote such a drastic step as opening up funds to non depository banks? 1. The Fed lending at Par for devalued assets to Non Banks. 2. Will more money be made available when the markets continues down? 3. How will write offs upon liquidation of the underlying asset be addressed, during the 28 days or before it is repledged to the next 28 day period? 

Brian HershkowitzChief Executive OfficerMaximum Value Group

One more consideration - RFC's market niche may be eroding

February 7, 2008

Analysis of:GMAC considers sale of troubled ResCap | www.ft.com

This is an important article because it is detailing the possible exit from the mortgage business of another player that only dealt minorly in the subprime world, if at all.  One of the considerations not discussed in the article is the effect of the potential Economic Stimulus Plan specifically on conduits such as ResCap RFC.

Gregory SampPrincipalMaximum Value Group

Mortgage loan restrictions by zip code or county: Prudent reaction to the declining housing market or redlining?

February 5, 2008

Analysis of:Zip Code 'Redlining': A Sweeping View of Risk | www.washingtonpost.com

Fannie Mae announced on December 5, 2007 that down payment requirements will be increased by 5 percentage points over the previously allowed minimum down payment in areas identified as declining.  While Fannie’s Desktop Underwriter (DU) will generate a message on loan casefiles when it appears that the property is in an area of declining home prices, Fannie also “strongly encourages” lenders to use other tools to independently assess current housing trends.  Kenneth Harney’s article notes that Countrywide has provided mortgage brokers with county wide ratings while GMAC-ResCap has provided brokers with zip code based ratings.  The higher level approach to declining markets resulting in an additional 5% investment by the homebuyer could lock some buyers out of the market and also will likely result in lenders having to defend themselves against new claims of redlining.

Joseph SmithPresident and CEODefault Mitigation Management

Fed Rate Cut Expected - Is that a good idea?

January 30, 2008

Analysis of:Fed Rate Cut Expected | news.aol.com

While many companies and investors are planning on what to do with cheaper money due to the rate cuts, one of the implications has been that a rate cut will help re-start the mortgage industry engine. Yes, originators will get some new refi's completed and earn some fee income, and there will be a few borrowers who were not in the market before that get in to it now. There will even be some purchases of some of the mortgage inventory. Due to tightening credit standards and qualification criteria, the number of new loans will be minimal and the refi's will be to the best credit worthy borrowers. Truthfully, the rate cuts of last week and this week will actually hurt the mortgage industry due to adverse selection in exisitng mortgage pools with subsequent accelerated write-downs.

Brian HershkowitzChief Executive OfficerMaximum Value Group

The Finger Pointing Continues In The Subprime World

January 28, 2008

Analysis of:Loan Reviewer Aiding Inquiry Into Big Banks | www.nytimes.com

This article is illustrating finger pointing looking for a villain, instead of "post-mortem" to find a hero.  What the industry needs is a clear plan for rebuilding the subprime securitization market.  In my opinion, a great part of that will be tied to the outsourced due diligence function, and the value those in that area add to the process.  One of the leading players in the space is now looking to be at odds with their client base. 

Brian HershkowitzChief Executive OfficerMaximum Value Group

The Real Shot In The Arm Is Buried In The Details - Mortgage Bankers Are Toasting Congress Tonight!

January 25, 2008

Analysis of:Congress Unveils Economic Stimulus Deal | biz.yahoo.com

The Economic Stimulus Act, approved today, will go along way towards its name, and stimulate the economy.  Questions of how much money, too whom, and what may have been sacrified in the cross-party negotiation will remain unanswered, but one thing is clear.  Congress has delivered a very potent set of stimulus to the mortgage markets.  By increasing the loan insuring (FHA) or purchasing (GSE's) authority to more than $700k, Congress answered a prayer and request of many of those in the industry.  The business people know that this gives them a very streamlined and efficient way to originate, fund, and deliver loans to the secondary market and service a large percentage of the population of "A" mortgagors.

Joseph SmithPresident and CEODefault Mitigation Management

How the current rate cuts and other stats will impact the market

January 24, 2008

Analysis of:Stocks Seek to Extend gains | money.aol.com

The reduction in interest rates is going to have a negative impact on the existing mortgage portfolios due to adverse selection. The decrease in those seeking unemployment benefits is very misleading. The stimulus package is not going to help those in real trouble and will pay some bills for most.

Brian HershkowitzChief Executive OfficerMaximum Value Group

Many More To Benefit

January 24, 2008

Analysis of:Collapse of the Subprime Mortgage Market Shines Spotlight on Risk Management and RiskMetrics | biz.yahoo.com

This article is a very good brief about the RiskMetrics IPO, but doesn't attempt to broadly touch the many areas that are set to shine from recent events in the subprime mortgage market.

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