In an apparent vote of confidence in the mortgage-backed securities market, Donaldson, Lufkin & Jenrette Inc. last week hired six senior staff members for its mortgage trading and mortgage capital areas.
Eileen Fahey, group vice president for Duff & Phelps Credit Rating, said DLJ has been strong in mortgage-backed securities over the years, but fell to eighth in market share last year, from fifth in 1998.
"This may be an effort to build that back again," she said. Some analysts expect higher demand for mortgage-backed securities this year, Ms. Fahey noted, adding that DLJ "has historically focused on a higher-margin product."
DLJ has hired Mark Tecotzky, 38, and Mitchell Levine, 33, as managing directors. Both will be responsible for trading all of DLJ's residential mortgage products. Mr. Tecotzky joined DLJ from PaineWebber, where he was a managing director in the mortgage area. Mr. Levine was head of the whole loan collateralized mortgage obligation desk at Credit Suisse First Boston.
Jeffery S. Detwiler, 38, and Daniel W. Thompson, 39, have joined DLJ as managing directors to set up an asset-based mortgage capital platform. Mr. Detwiler was managing director in charge of the securitization business at Residential Funding Corp., a subsidiary of GMAC Mortgage Corp. Mr. Thompson was a managing director in the asset management area of the same firm.
DLJ also hired Brett Marvin from Societe Generale in New York. Mr. Marvin, 39, is senior vice president and head of adjustable-rate mortgage trading. Joining him is Brian Bowes, 29, as a vice president in the same area. Mr. Bowes was a money manager with the Metropolitan Transit Authority.
All six report to Richard D. Winter Jr., managing director in the whole loan collateralized mortgage obligation trading group.
The buildup comes amid signs of stabilization in the mortgage industry.
After two weeks of decreases in mortgage applications, the Mortgage Bankers Association of America's most recent weekly survey found that applications for the week ending March 3 increased 18.2%.
David Lereah, chief economist for the MBA, said that despite rising interest rates, home sales remain robust. "With the housing market strong," he said, "Wall Street might be reacting to the fact that consumers are still buying homes, despite rates."