Friday, Jun 28, 2013
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What We’re Hearing: Cerberus Buys a Mortgage Firm? / Fear and More Fear for Jumbo Issuers / Freedom Sizes its Broker Network at 2,500 Strong / Mortgage Insurers Raise $8 Billion in Capital
By Paul Muolo
Remember the IPO filing by Cerberus Mortgage Capital, which hit the SEC’s shelves back in early February? So far, there’s been no movement on the deal, but industry sources say that hasn’t stopped Cerberus from being active in the mortgage space. Within the past 10 days, a unit of Cerberus called First Key Holdings bought a mortgage company based in Georgia, according to one source who was briefed on the transaction. There’s talk that First Key/Cerberus may move the business to Westchester County in New York and that some former Lehman officials are involved. At this point, details are sketchy. Former Freddie Mac executive Bruce Witherell is in charge of CMC and perhaps First Key. CMC’s original goal was to buy agency and non-agency MBS, but also whole loans and mortgage servicing rights…
And in case you didn’t know, Cerberus hasn’t exactly had a stellar record in mortgages. Before the housing bust, the company (which operates dozens of funds) bought a little company called GMAC Mortgage, which eventually became the property of Uncle Sam…
So, we don’t need Fannie Mae and Freddie Mac and the private market can provide for all? Don’t bet on it. The recent rapid rise in rates has jumbo securitizers spooked. At an Inside Mortgage Finance webinar Thursday the headline was clear: No new jumbo MBS deals, for now…
How high can the servicing acquisition market go? Most potential MSR buyers like Ocwen and Nationstar say $1 trillion in (mostly legacy) servicing rights will change hands the next two years. But a new IPO filing from Cherry Hill Mortgage Investment Corp. says the potential market is $2 trillion. Cherry Hill – which has yet to go public – is an affiliate of Freedom Mortgage…
Freedom, by the way, is privately held. The company was launched back in 1990 by Stan Middleman and rarely reveals much information about itself. But thanks to the Cherry Hill IPO filing all that is changing. In fact, once CHMIC goes public Middleman (via CHMIC) will be revealing a whole lot more about the firm’s financial position. Here are two tidbits about Freedom courtesy of the IPO filing by its REIT: the nonbank lender has a network of 2,500 loan brokers that it uses. Its subservicer of choice is LoanCare Servicing Center which is part of FNF Servicing Inc. FNF is actually owned by Fidelity National Financial, the publicly traded title insurance giant…
We’re told that Stan Middleman picked the name Cherry Hill because it’s his home town. But it’s also where Freedom is based. That’s New Jersey, by the way…
Have mortgage insurance companies raised $8 billion in capital over the past few years? It’s a figure that Shellpoint chairman Lewis Ranieri recently mentioned in a policy speech in Washington, citing the health of the sector. We know that two relatively new players in the MI space – Essent and National MI – each raised $500 million. (Goldman Sachs is one of Essent’s backers.) But where did the $8 billion figure come from? We’re told that a former mortgage insurance executive working for Ranieri dug it up. The figure comes from an open and operating MI.
AI
