Time away: Given that I’m on holiday today, and that it’s the day after Easter (read: slow news day), I decided I’d post my commentary on Monday for HW readers. And I’ll make up for being lazy on the news with an extra-long column. Merrill Lynch, again: We’ve heard from more than a few brokers this past week who are, well, upset at what they see as First Franklin “playing by its own rules.” Earlier HW commentary from March 3 noted that the Merrill-owned subprime shop had indeed altered its underwriting criteria, although the company would not specify at the time what programs had either changed or been eliminated from its offer sheet. Turns out that while the company has allegedly eliminated much of its 100 percent financing to subprime borrowers (those below a 620 FICO), competing brokers tell HW that First Franklin is still offering products that no other — or, to be fair, very few — lenders will be able to compete with. To hear competitors explain it, First Franklin is offering products “they wouldn’t allow even one of their warehouse lenders to fund,” according to one anonymous source. The once-rampant rumor that Merrill wasn’t interested in backing third parties once it owned its own subprime shop hasn’t exactly gone away. If anything, it’s now making its second round. Is there any truth to this? Let me hear it – [email protected]. I’m all ears, either way. Alt-A starts to rumble: Most HW readers by now have seen our coverage of American Home Mortgage Investment Corp.’s announcement last week that it would miss earnings guidance due to problems in the Alt-A credit sector. It was only a few weeks back — on March 6, to be exact — that the company went to a full court press with the media, saying it was unfairly categorized as “at risk” due to the subprime credit crunch. I commented in early February that if subprime credit woes spread into Alt-A, we could be facing longer-term market turbulence for mortgages. It looks like that point is no longer a matter of “if” — and the short positions taken on fellow Alt-A lender IndyMac by Wall Street investors today alone would seem to suggest some more trouble in the offing. Let’s hope it’s short-lived. Tanta-riffic: If you haven’t visited Calculated Risk, I’d recommend a strong look. Great blog run by a retired business exec, who managed to recruit postings from a former mortgage exec named Tanta. I’m not out to take anything away from the man known only as CR, whose take on economic trends is downright uncanny, but this Tanta he’s got blogging with him over there doesn’t just know her stuff — she’s got an axe to grind, too. (And I’ve got it on very good information that Tanta is, in fact, a she.)

She’s serviceable when describing the somewhat mundane details of how foreclosure and REOs differ, a topic that I suppose is relevant for non-HW readers that work outside of the industry. But it’s when she shows her knowledge of the industry and takes it to task with biting criticism that she’s probably at her best. Any good reporter can cover subprime in a story and interview a Countrywide exec and some analysts at UBS. (Trust me, I used to do it for a living). It’s a real blast, however, to read commentary from someone who really understands what she’s getting at. Lost and found: We recently ran a piece that looked at new entrants into subprime lending — part of the article discussed the re-emergence of the FHA program weeks before any other media outlet covered it, and another part looked at the private-equity dollars still foraging for a return in subprime lending. Case in point: Creative Mortgage Lending, who had been putting on an PR blitz regarding their subprime exotics. At the time, company execs wouldn’t identify their funder, who was soundly panned by many of those interviewed by HW at the time for the story. Now we know who funds CML, thanks to an ever-vigilant HW reader who sent us a link to a private equity firm called Strength Capital Partners (see them here). The company is a middle-market leveraged buyout firm founded by David McCammon, his son Mark McCammon and Michael Bergeron. The senior McCammon is a retired VP of Finance from Ford Motor Co. and started Strength Capital in 2000 by raising capital primarily from high net worth individuals. Here’s hoping the McCammons’ other investments are performing well for them.