Back to the Future
Come Saturday, PNC Financial Services Group Inc. will be originating, securitizing and servicing mortgages under its own name — again.
The Pittsburgh banking company, which got out of the mortgage business in 2001 and has since offered home loans in its bank branches under a joint venture with Wells Fargo & Co., is winding down the venture this weekend and putting the PNC Mortgage handle on the business it acquired in last year's takeover of National City Corp.
And that will make National City Mortgage's chief executive, Sy Naqvi, the CEO of PNC Mortgage — again. Naqvi had run the old PNC Mortgage from 1993 until the unit was sold to Washington Mutual Inc.
After a detour that included posts at DeepGreen Financial Inc. and Harley Davidson Financial Services Inc., Naqvi returned to PNC in February to oversee the integration of National City Mortgage.
"Having a full-service mortgage company as part of the [National City] acquisition gave PNC the opportunity to look at the strategic fit of the business and how it could serve their customers best," Naqvi said. But until the decision was made to keep the business, National City Mortgage found itself going head to head with its own parent company.
"We operated in the same markets and actually competed for customers" with the PNC-Wells venture, Naqvi said. "Going forward, we are going to be on the same team."
Naqvi said all of the joint venture's employees opted to join PNC, which in addition to offering mortgages at PNC branches also will put its brand on the 300 National City stand-alone retail mortgage sales offices located around the country.
He said he expected PNC to maintain many of the Ohio facilities where National City Mortgage had handled servicing, document imaging and post-closing operations.
Jim Rohr, PNC's chief executive, is renowned for steering PNC well clear of the mortgage boom during the early part of this decade.
On a conference call last month, he said he aimed to make the new PNC Mortgage a top-10 retail lender, and that the unit would "deepen customer relationships consistent with our moderate risk profile. This line of business also provides high-quality assets for investment."
Naqvi said PNC will continue to refrain from offering exotic products or getting involved in the broker and correspondent channels. But with a full-service operation, PNC can now design products specific to the needs of its different customer segments, such as high-net-worth clients who might be interested in jumbo hybrid adjustable-rate mortgages, he said.
"We're thinking about loans that are still very much investment-grade, conservative loans but have" customized features, he said. (Securitization of mortgages has essentially stopped except for bonds backed by Fannie Mae, Freddie Mac and the Government National Mortgage Association, which do not deal with loans for more than $729,750.)
The Federal Housing Administration postponed the release of its annual audit, which had been scheduled to take place Wednesday, saying auditors did not finish the report in time.
The Department of Housing and Urban Development, which oversees the FHA, said it would meet with the auditors Wednesday "to ensure that we can report to Congress in a timely and accurate manner."
HUD warned in September that the study would show FHA's congressionally mandated capital reserve ratio dropping below 2%. Since then the agency has taken a number of steps to control its risk, such as by tightening requirements for lenders that do business with FHA.
Still, concerns remain that the FHA, whose volume has grown astronomically in the last two years, will need a government bailout. Rep. Darrell Issa, R-Calif., and Rep. Spencer Bachus, R-Ala., sent HUD Secretary Shaun Donovan a letter Wednesday requesting, among other things, "data supporting claims that the FHA will not need to ask Congress for any funding."
Jim Russell has joined Collingwood Group LLC, a Washington consulting firm, to lead a new real estate asset management practice.
Russell said in an interview Tuesday that Collingwood plans to advise banks laboring with troubled loans, connecting them with other clients that can offer help. Such help could range from managing properties that serve as collateral to equity injections into the banks themselves, he said.
One possibility, Russell said, would be to place a loan with a special servicer that could guide decisions on tenants, for example, in an attempt to boost income from a property and "restore the loan to a performing status and then return it" to the bank.
Before joining Collingwood, Russell was a managing director at Prescient Inc., whose businesses include managing real estate and marketing nonperforming assets. Collingwood's other managing directors include Joe Murin, a former Ginnie Mae president, and Brian Montgomery, a former FHA commissioner.