Good news around the US Mortgage Market is trying very hard to make its way back into the headlines. This week the Fed cut interest rates by 50 bps which set back the bear market fans. Wells Fargo provided some insight that they see the market recovering and that the current woes are only temporary. With that said, HSBC shutdown its wholesale sub-prime business unit which is not terribly surprising as the number of subprime business units left are starting to become rare. The market may recover but it seemingly is going to be a different world with a higher level of regulatory oversight and lenders less inclined to offer nonconforming loan products.
On the regulatory front, the Office of Thrift Supervision suggested to Congress that they are in the best position to provide some level of federal supervision over independent mortgage companies. This actually made some sense but the impact is that the small independent mortgage banker is going to have to expend a great deal more time and resources on compliance. On the M&A front, ARC Systems announced that they are open to offers. The Accredited deal with Lone Star is back on, PHH deal is still questionable
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