National Mortgage News -- breaking more than its share of news this week -- posted a late news item today that said investment banker Nomura Securities has shut down its subprime mortgage conduit and laid off an unspecified number of employees:
Investment banker Nomura Securities has closed its nonconforming mortgage conduit and laid off staff in its fixed-income research department, industry sources have told MortgageWire. Meanwhile, one executive close to Wall Street said three major investment banking houses he has done business with are "prepping" their mortgage departments for layoffs. At deadline time, a Nomura spokesman had not returned telephone calls.
IndyMac said earlier this week it is also considering shuttering its conduit operations as well. NMN editor Paul Muolo, in his weekly "What We're Hearing" column, has some strong words for the industry -- and it looks like he's onto what's on all of our minds right now:
I'll put it bluntly: if you operate a non-depository mortgage firm (lender or servicer) and don't have a deep-pocketed parent or hedge fund as a sugar daddy you're likely to be out of business by year-end, probably sooner. In the 20-plus years that I've been covering residential finance I haven't seen a financial meltdown this swift since the S&L crisis of the mid-to-late 1980s.
I'd add that this crisis is moving perhaps more swiftly than in the 80s, and likely is every bit as devastating -- perhaps moreso now than then, given the global nature of the mortgage and larger credit markets, and the sheer size of the third-party secondary markets.