ELoan Mortgage bailed out on the subprime market about a year ago. Back then ELoan Mortgage was the first of many lenders to turn their backs on the subprime borrower.
As I predicted a few posts back, the bruised credit borrower would be left out in the cold the minute the big boys figured out the subprime loans they pushed so feverishly just 18 months ago are ticking time bombs ready to explode.
ELoan Mortgage subprime lending division showed a $39 million loss. This lead to the retirement of the wholesale operations President, Cameron E. Williams.
Like ELoan Mortgage, Mortgage Lenders Network of Connecticut also closed their bad credit wholesale operation so abruptly as to leave borrowers in the lurch for loans already approved. (see comments below)
On a personal note, a real estate agent friend of mine recently corroborated this ever increasing problem when 3 out of 4 of her closings were stalled while the buyer’s mortgage broker scrambled to find another lender after the first one bailed for the exact same reasons.
If you are a consumer needing a bad credit loan, or you’re in one of these loans now requiring a refinance to avoid increasing rates, you’ve probably already missed the boat.
A word to the wise…
Of course, their A paper lending division is still up and running as their TV commercials never stop!
ELoan Mortgage whose slogan is “Radically Simple” has widespread TV ad campaigns touting no cost loans. This review of them here would have to be negative since that right there puts them in the dog house with me. Perpetuating the idea mortgages are free sends a mixed message and does no one any good.
Of course, if you’ve read any Mortgage Insider articles on no cost loans you know the only way they can deliver on that message is to charge higher rates…much higher. You would also know that since ELoan Mortgage is a bank they will never have to disclose the “extra” profit they make over and above covering the closing costs.
I’ll conclude my ELoan Mortgage review by saying they are also owned by a Puerto Rican mega-bank called Popular, Inc. I don’t know about you but I’m not sure I’d want private financial information sitting off-shore.
Some thoughts about ELoan Mortgage to ponder before submitting a “Radically Simple” online loan application!
Source
Saturday, November 28, 2009
Sunday, November 15, 2009
Popular, Inc. Reports Financial Results for the Quarter and Nine Months Ended September 30, 2009
Popular, Inc.
("the Corporation") (Nasdaq: BPOP) reported a net loss of $125.0 million for
the quarter ended September 30, 2009, compared with a net loss of
$183.2 million for the quarter ended June 30, 2009, and a net loss of
$668.5 million for the quarter ended September 30, 2008. For the nine months
ended September 30, 2009, the Corporation's net loss totaled $360.7 million,
compared to a net loss of $541.0 million for the same period in 2008.
Refer to the accompanying Exhibit A - Financial Summary for "per common
share" information and key performance ratios. Also, refer to Exhibit B for
credit quality information and to Exhibit C for summarized income statement
information by reportable segment. As indicated in previous filings, in 2008,
the Corporation discontinued the operations of its U.S. mainland-based
subsidiary Popular Financial Holdings ("PFH"), and thus the results of PFH are
presented as part of "Loss from discontinued operations, net of income tax" in
Exhibit A.
"Third-quarter results still reflect the effects of a deepening recession
and rising unemployment in Puerto Rico. The island's residential construction
market remains stagnant with low absorption rates, requiring a high level of
provisioning," said Richard L. Carrion, Chairman of the Board and Chief
Executive Officer of Popular, Inc.
Carrion continued, "While some U.S. economic indicators have shown some
improvement, our consumer and mortgage portfolios are still feeling the impact
of job losses on the U.S. mainland. We expect these economic trends,
particularly in Puerto Rico, to continue for the foreseeable future. We
continue to work on improving our U.S. franchise and maintaining our dominant
position in Puerto Rico for the turn of the cycle."
During the third quarter of 2009, the Corporation took steps to increase
its capital position that resulted in total additions of $1.4 billion to Tier
1 common equity.
On August 25, 2009, the Corporation completed the settlement of its
previously announced Exchange Offer to issue up to 390 million shares of its
common stock in exchange for its Series A and Series B preferred stock and for
its trust preferred securities. As part of the Exchange Offer, the Corporation
issued over 357 million new shares of common stock for a total of over 639
million common shares outstanding. This Exchange Offer resulted in an increase
in common stockholders' equity of $919.1 million, resulting from the exchange
of Series A and Series B preferred stock and trust preferred securities into
common stock. This included newly issued common stock and surplus of $608.4
million and a favorable impact to accumulated deficit of $310.7 million,
including $80.3 million in gains on the extinguishment of trust preferred
securities recorded in the consolidated statement of operations for the
quarter ended September 30, 2009.
Also, as announced on August 10, 2009, the Corporation agreed with the
U.S. Treasury to exchange all $935 million of its outstanding shares of Series
C preferred stock of the Corporation for $935 million of newly issued trust
preferred securities (the "New Trust Preferred Securities"). The New Trust
Preferred Securities have a distribution rate of 5% until December 5, 2013 and
9% thereafter (which is the same as the dividend rate on the previously
outstanding Series C preferred stock). The transaction with the U.S. Treasury
settled on August 24, 2009. The particular exchange with the U.S. Treasury
resulted in a favorable impact to accumulated deficit of $485.3 million
resulting from the excess of (1) the carrying amount of the securities
surrendered (the Series C preferred stock) over (2) the fair value of the
consideration exchanged (the New Trust Preferred Securities).
The Corporation's Tier 1 common equity to risk-weighted assets ratio
increased from 2.45% as of June 30, 2009 to 6.88% as of September 30, 2009 as
a result of the transactions described above. See "Reconciliation of Non-GAAP
Financial Measure" for a reconciliation of Tier 1 common equity to common
stockholders' equity and a discussion of our use of this non-GAAP financial
measure in this press release.
Source
("the Corporation") (Nasdaq: BPOP) reported a net loss of $125.0 million for
the quarter ended September 30, 2009, compared with a net loss of
$183.2 million for the quarter ended June 30, 2009, and a net loss of
$668.5 million for the quarter ended September 30, 2008. For the nine months
ended September 30, 2009, the Corporation's net loss totaled $360.7 million,
compared to a net loss of $541.0 million for the same period in 2008.
Refer to the accompanying Exhibit A - Financial Summary for "per common
share" information and key performance ratios. Also, refer to Exhibit B for
credit quality information and to Exhibit C for summarized income statement
information by reportable segment. As indicated in previous filings, in 2008,
the Corporation discontinued the operations of its U.S. mainland-based
subsidiary Popular Financial Holdings ("PFH"), and thus the results of PFH are
presented as part of "Loss from discontinued operations, net of income tax" in
Exhibit A.
"Third-quarter results still reflect the effects of a deepening recession
and rising unemployment in Puerto Rico. The island's residential construction
market remains stagnant with low absorption rates, requiring a high level of
provisioning," said Richard L. Carrion, Chairman of the Board and Chief
Executive Officer of Popular, Inc.
Carrion continued, "While some U.S. economic indicators have shown some
improvement, our consumer and mortgage portfolios are still feeling the impact
of job losses on the U.S. mainland. We expect these economic trends,
particularly in Puerto Rico, to continue for the foreseeable future. We
continue to work on improving our U.S. franchise and maintaining our dominant
position in Puerto Rico for the turn of the cycle."
During the third quarter of 2009, the Corporation took steps to increase
its capital position that resulted in total additions of $1.4 billion to Tier
1 common equity.
On August 25, 2009, the Corporation completed the settlement of its
previously announced Exchange Offer to issue up to 390 million shares of its
common stock in exchange for its Series A and Series B preferred stock and for
its trust preferred securities. As part of the Exchange Offer, the Corporation
issued over 357 million new shares of common stock for a total of over 639
million common shares outstanding. This Exchange Offer resulted in an increase
in common stockholders' equity of $919.1 million, resulting from the exchange
of Series A and Series B preferred stock and trust preferred securities into
common stock. This included newly issued common stock and surplus of $608.4
million and a favorable impact to accumulated deficit of $310.7 million,
including $80.3 million in gains on the extinguishment of trust preferred
securities recorded in the consolidated statement of operations for the
quarter ended September 30, 2009.
Also, as announced on August 10, 2009, the Corporation agreed with the
U.S. Treasury to exchange all $935 million of its outstanding shares of Series
C preferred stock of the Corporation for $935 million of newly issued trust
preferred securities (the "New Trust Preferred Securities"). The New Trust
Preferred Securities have a distribution rate of 5% until December 5, 2013 and
9% thereafter (which is the same as the dividend rate on the previously
outstanding Series C preferred stock). The transaction with the U.S. Treasury
settled on August 24, 2009. The particular exchange with the U.S. Treasury
resulted in a favorable impact to accumulated deficit of $485.3 million
resulting from the excess of (1) the carrying amount of the securities
surrendered (the Series C preferred stock) over (2) the fair value of the
consideration exchanged (the New Trust Preferred Securities).
The Corporation's Tier 1 common equity to risk-weighted assets ratio
increased from 2.45% as of June 30, 2009 to 6.88% as of September 30, 2009 as
a result of the transactions described above. See "Reconciliation of Non-GAAP
Financial Measure" for a reconciliation of Tier 1 common equity to common
stockholders' equity and a discussion of our use of this non-GAAP financial
measure in this press release.
Source
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