Mortgage Execs Sting Lenders – Mortgage Industry Insider from MortgageDaily.com
DALLAS, February 26 /PRNewswire/ Recent boardroom business at mortgage-related companies included two scandals involving former executives, according to https://www.mortgagedaily.com — the dominant source of online news for the mortgage industry.
Intermountain Mortgage Co.’s CEO told MortgageDaily.com that its former CFO admitted to stealing from the company.
The thefts were detected after the CFO was seriously hurt in a car accident.
“People filling in for her began noticing irregularities,” he told MortgageDaily.com. “Once she was lucid and able to discus it she denied it. But she finally admitted to it.”
The company has since laid off nearly 20 percent of its staff. (https://www.mortgagedaily.com/ExecutiveTheftIntermountain022307.asp)
GB&T Bancshares Inc. announced it increased its allowance for loan losses by $9.7 million.
The increase arose from a recent FDIC examination at a subsidiary “and relates primarily to several loan relationships originated by the president of that bank in which it is apparent that this officer did not follow numerous bank loan policies and procedures,” GB&T said.
GB&T’s CFO told MortgageDaily.com the portfolio may have “some residential loans.” (https://www.mortgagedaily.com/GbtCharge022107.asp)
In other corporate mortgage news, NovaStar Financial Inc. reported a fourth quarter net loss of $14.4 million. NovaStar, which is considering whether to maintain its REIT status, said it believes current reserves are adequate to cover the repurchase risk for all loans sold to date. (https://www.mortgagedaily.com/NovastarProduction022107.asp)
There are rumblings on Wall Street that collateralized-debt obligations could be at risk.
One Wall Street figure told MortgageDaily.com CDOs backing home equity loans “can’t be placed and this ‘fade’ may be enough to have fairly demonstrable impact on some originators.” (https://www.mortgagedaily.com/SubprimeCdo022007.asp)
But problems in nonprime lending are unlikely to spill over into the general economy.
While the markets have been spooked by the recent subprime meltdown, “we also suspect that concerns about weakening within the subprime sector have been somewhat overblown,” the chief strategist for Citigroup said in an investor report.
“We don’t think that an uptick in consumer loan delinquencies, from residential mortgage or other sources, will be enough to trigger a major economic meltdown,” he said. (https://www.mortgagedaily.com/SubprimeOutllookCiti021907.asp)
Complete corporate coverage at:Â https://www.mortgagedaily.com/corporate.asp
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