Freddie Mac's recent failed attempt to broaden its charter was a hot-button issue at the Mortgage Bankers Association of America's annual convention last week.
Mortgage insurers felt directly threatened by its plan to insure some loans itself, and mortgage bankers are wary of recent forays by the government-sponsored enterprises outside their usual role of providing secondary-market liquidity.
"The political environment for the GSEs has actually been hurt," said Roy J. Kasmar, president and chief operating officer of Amerin Guaranty Corp., a mortgage insurer based in Chicago.
Freddie Mac "mobilized the mortgage insurers, the MBA, and the larger lenders to be quite aggressive" in opposing the proposal.
Mr. Kasmar said his industry enjoyed the support of its customers, the mortgage bankers, because "any attempt to broaden the agencies' powers is perceived as one step closer to getting into mortgage banking."
In a press conference, Angelo Mozilo, the chief executive officer of Countrywide Credit Industries, repeatedly used the verb "nationalize" to describe what he felt the government-sponsored enterprises were attempting to do to the ancillary businesses of mortgage lending.
Mr. Kasmar said, "The industry is prepared to draw a line in the sand."
Industry veteran Mark L. Korell also attended the convention. He was just named chairman and CEO of Finet Holdings Corp., Walnut Creek, Calif.
Mr. Korell, the former chairman and CEO of Norwest Mortgage, describes his new employer as "an emerging electronic mortgage bank." It is licensed in 41 states and is originating loans on the Internet at a rate of $2 billion per year. Mr. Korell plans to build a national presence and make "a variety of acquisitions."
Mr. Korell was most recently the president and CEO of IMX Mortgage Exchange, San Ramon, Calif., which he left during the summer.
The recent collapse of the subprime market and BankAmerica Corp.'s $250 million servicing writedown in the third quarter inspired some gallows humor.
United Financial Inc., a Denver servicing brokerage, gave out buttons with a diagonal line crossing out the word "impairment"-a reference to the technical term for losses due to prepayments.
Frank Mohan, president and CEO of Source One Mortgage Services Corp., Farmington Hills, Mich., said his company would sell its subprime loans strictly in the whole-loan market.
"We have not been involved at all nor do we intend to be involved in securitization. It's a four-letter word."
Nevertheless, Mr. Mohan intends to expand his company's subprime business and expects its volume in that area to increase to $700 million next year from $300 million this year.
Source One recently established a front-end origination software system designed by Eastern Software Corp., a Sharon, Pa., vendor. It was heavily customized to accommodate Source One's increased focus on lending to consumers with blemished credit records.