retail mortgage lending

Apache is functioning normally

In a statement released after market close, Washington Mutual said it will have to set aside far more than expected for loan losses, leading to a fourth quarter loss and massive restructuring.

The Seattle-based thrift and mortgage lender plans to cut more than 3,000 jobs and slash its dividend by 73 percent, while also offering $2.5 billion in convertible preferred stock in a bid to raise capital.

“A substantial infusion of new capital, significant expense reductions, the major change in our home loans business, and our planned dividend reduction all combine to further fortify WaMu’s strong capital and liquidity position,” said WaMu Chairman and Chief Executive Officer Kerry Killinger.

“These actions will also better position us to pursue various initiatives, particularly in our leading retail banking business — which is at the core of our business strategy.”

WaMu will discontinue all lending through it subprime mortgage channel, closing roughly 190 of 336 home loan centers and sales offices, and nine Home Loans processing and call centers.

The layoffs will affect 22 percent of its Home Loans staff, or roughly 2,600 employees, along with 550 corporate jobs and support positions.

The thrift will also close WaMu Capital Corp., its institutional broker-dealer business, as well as its mortgage banker finance warehouse lending operation.

The cost of these so-called “expense reduction measures” will result in approximately $140 million in additional expenses in the fourth quarter.

The restructuring will be accompanied by an increase in retail mortgage lending via its many banking branches nationwide, a route many large banks are leaning towards.

The banking giant will take a fourth quarter after-tax charge of approximately $1.6 billion for the writedown of all the goodwill associated with the Home Loans business, and now expects its fourth quarter provision for loan losses to be between $1.5 and $1.6 billion.

The company currently expects its first quarter 2008 provision for loan losses to range between $1.8 to $2.0 billion, and to remain elevated through 2008.

WaMu believes total U.S. mortgage loan origination will fall to $1.5 trillion in 2008, the lowest level in eight years, from an estimated $2.3 trillion to $2.4 trillion this year.

Shares of Washington Mutual fell $1.59, or 8.00%, to $18.29 in after hours trading.

Update: WaMu upped their preferred stock offering to $3 billion.

Source: thetruthaboutmortgage.com

Apache is functioning normally

Guaranty Bank FSB (of Wisconsin) announced today that it is shuttering its wholesale mortgage lending unit GB Mortgage.

“Effective today, April 30, 2009, GB Mortgage, the wholesale lending division of Guaranty Bank will no longer accept new loan applications,” the company said in a statement on its website.

“Existing locks will be honored and approved loans must lock by May 8, 2009.”

GB Mortgage didn’t provide a reason for the closure, though it’s pretty clear that the wholesale mortgage lending channel is still contracting, despite some new players carefully re-entering the space.

“This decision has been an extremely difficult one, but we feel it is the most prudent course of action at this point in time.”

According to a rate sheet found on their website, they offered a small selection of conventional, conforming fixed-rate mortgages to brokers who didn’t necessarily “produce the huge numbers needed to get the attention of today’s mega-wholesale lenders.”

GB Mortgage was formed in 2007 after the merger of second mortgage lender GB Home Equity and primary mortgage lender GN Mortgage.

The company operated an “extensive network of third party originators,” serving roughly 5,000 independent mortgage brokers and bankers in 47 states.

Guaranty Bank also has a retail mortgage lending unit, which operates under the “Shelter Mortgage” family of companies.

“Guaranty bank will continue to originate loans through its retail channel, which remains unaffected by this change.”

Check out my ongoing list of closed lenders, mortgage layoffs and mergers.

Source: thetruthaboutmortgage.com

Apache is functioning normally

Back in July, the NCAA granted college athletes the opportunity to make money by using their “name, image and likeness” (NIL).

This means getting paid to sign autographs, make appearances, or promote products and services, among other things.

Importantly, it keeps college sports from turning into pay-for-play schemes, while also providing clarity to student-athletes and their families.

These NIL opportunities are beginning to materialize, and we now have what appears to be the first mortgage-related deal.

The nation’s second largest mortgage lender, United Wholesale Mortgage, is offering $500 per month to Michigan State University (MSU) athletes.

Because UWM is a wholesale mortgage lender, these athletes will essentially be promoting the mortgage broker model.

MSU Athletes Can Earn $500 Per Month for the 2021-2022 Season

This new partnership involves MSU men’s basketball and football players, of which there are 133 in total.

Each one will have the opportunity to earn $500 per month for the 2021-2022 season, which will amount to $6,000 per player.

In terms of how they’ll market UWM, it’ll apparently be via social media channels as opposed to a clothing partnership.

Per Crain’s Detroit Business, the MSU players won’t “be required to wear UWM logos on their jerseys.”

This differs from UWM’s earlier deal with the Detroit Pistons, in which their logo will feature on the left front strap of official team jerseys for the 2021-22 NBA season.

So expect all your favorite MSU student-athletes to pitch mortgage brokers and specifically UWM on Instagram and other social media platforms.

Rocket Mortgage Is the Official Mortgage Provider of MSU Athletics

What makes this story a little more interesting is the fact that UWM isn’t even the “official mortgage provider” of MSU.

That title goes to crosstown rival Rocket Mortgage, which recently inked a new five-year deal to be the presenting sponsor of the men’s basketball team.

If you visit the Breslin Center for a hoops game, you’ll see signage that reads “MSU Spartans Presented by Rocket Mortgage.”

There will also be “considerable branding” throughout the Breslin Center and Spartan Stadium for Rocket Mortgage.

Notably, the Rocket Mortgage logo will be “prominently displayed” on MSU football coach Mel Tucker’s headset, along with the MSU men’s and women’s basketball team benches and clipboards.

So while the players may be pitching UWM, they’ll have to compete with the massive Rocket brand campaign at the same time.

Rocket Mortgage and UWM Founders Are Both Michigan State Alum

As to why MSU appears to be the crown jewel to both the #1 and #2 mortgage company in the United States, it has a little to do with history.

It just so happens to be the alma mater of Rocket Mortgage founder Dan Gilbert, along with current UWM president and CEO Mat Ishbia.

Ishbia is actually the founder’s son, and joined UWM as its 12th team member after briefly coaching the MSU basketball team alongside Tom Izzo.

Before that, Ishbia also won a national championship with the Spartans basketball team back in 2000.

Both Rocket Mortgage and UWM have also been very active in metro Detroit and nearby, contributing to revitalization efforts in the state.

So it appears this is a sort of battle between the companies, which constantly exchange jabs in somewhat subtle, yet not so subtle ways.

This latest exchange makes MSU the venue for a proxy war between retail mortgage lending and wholesale lending, the latter fueled by mortgage brokers.

For the record, Rocket Mortgage also announced that through new and expanded multi-year deals, it now has partnerships with 25 of the “most influential and prestigious athletic programs” in the nation.

That list includes four Historically Black Colleges and Universities (HBCUs): Grambling State, Howard, Jackson State, and Southern University.

Perhaps the Rocket/UWM rivalry is better than college sports…

Source: thetruthaboutmortgage.com

Movement Mortgage names Lyra Waggoner chief information officer

Retail lender Movement Mortgage announced the appointment of Lyra Waggoner as its chief information officer to grow its platform.