Friday, December 11, 2009

GMAC at the Forefront of Ginnie Mae's Troubled Issuers

In response to Taxpayers On The Hook For Ginnie Mae's Rampant Growth http://globaleconomicanalysis.blogspot. ... -maes.html I received a nice Email from the Center for Public Integrity inviting me to take a look at Ginnie Mae's Troubled Issuers. The data is interesting to say the least. http://www.publicintegrity.org/project_ ... GinnieMae/

Problem Issuers by Compare Ratio



Compare ratio is the comparison of a lender's default rates with other lenders in a geographic region as defined by HUD. For example, if a lender has a compare ratio of 200 percent, the Federal Housing Administration loans made by that lender are defaulting at twice the rate of its competitors in its geographic region. A compare ratio of 200 percent or more is grounds for suspension and a compare ratio of 150 percent or more indicates "a problem" lender, according to FHA Commissioner David Stevens.

Compare Ratios Over 150%

Pine State Mortgage Corporation - 314% - Default Rate 18.86%
Premium Capital Funding, LLC dba Topdot Mortgage - 238% - Default Rate 14.31%
Ideal Mortgage Bankers, Ltd, dba Lend America^ - 235% - Default Rate 14.14%
IndyMac FSB, dba OneWest Bank - 211% - Default Rate 12.67%
First Horizon Home Loans dba First Tennessee - 207% - Default Rate 12.45%
First American Mortgage Trust - 205% - Default Rate 12.31%
First Guaranty Mortgage Corp. - 204% - Default Rate 12.26%
American Financial Resources, Inc. - 202% - Default Rate 12.16%
Weststar Mortgage Corporation - 198% - Default Rate 11.88%
Gateway Mortgage Group - 198% - Default Rate 11.9%
Colonial Bank - 189% - Default Rate 11.38%
MVB Mortgage Corporation - 183% - Default Rate 11.01%
GMAC Mortgage - 171% - Default Rate 10.29%
Allied Home Mortgage Corporation - 168% - Default Rate 10.09%
Taylor Bean & Whitaker Mortgage^ - 163% - Default Rate 9.77%
Shore Financial Services, Inc. dba Shore Mortgage - 159% - Default Rate 9.54%

Problem Issuers by Loan Volume



The charts in the article are interactive so please give it a look.

GMAC - The Gift That Keeps On Giving

None of the above banks should be doing business with Ginnie Mae. Indeed, most of them should not be doing business at all, especially GMAC.

To help bailout GM , the Obama administration screwed the bondholders to appease the unions, and taxpayers channeled additional money to GMAC so that it could continue making loans. GMAC went to the well three times as the following articles show.

Flashback October 28: GMAC May Receive Third Government Bailout in November http://www.bloomberg.com/apps/news?pid= ... vqTkQC.Ft4

GMAC Inc., the lender that received two government bailouts totaling $13.5 billion, is negotiating with the Treasury Department for a possible third lifeline next month, people familiar with the matter said.

The U.S. is studying a capital injection of $2.8 billion to $5.6 billion, according to the people, who declined to be identified because the transaction hasn’t been agreed upon.

GMAC may get more government money because the Obama administration regards the lender as crucial to the survival of the U.S. auto industry. General Motors Co., its former parent, and Chrysler Group LLC rely on the firm to finance their vehicle buyers. GMAC will report third-period results on Nov. 4, after losses in seven of the past eight quarters.

“It’s outrageous that the taxpayers are being asked yet again to support a troubled enterprise,â€