The CFPB has issued a final rule that increases Home Ownership and Equity Protection Act coverage for mortgages with high interest rates, fees or prepayment penalties. The rule expands HOEPA to cover home]purchase loans and home equity lines of credit; revises the lawfs rate and fee thresholds for coverage; and adds a new coverage test based on a transactionfs prepayment penalties. The final rule implements the Dodd-Frank Actfs revisions to HOEPAfs coverage tests by providing that a transaction is a high-cost mortgage if any...
The final rule issued by the Consumer Financial Protection Bureau this week to define ability-to-repay requirements and “qualified mortgages” puts non-agency and subprime mortgages at a significant disadvantage to prime and agency mortgages. The slant against non-agency loans goes beyond what was required by the Dodd-Frank Act, according to industry analysts. The rule is set to take effect Jan. 10, 2014. Under the final rule, qualified mortgages must meet...
Redwood Trust is set to issue its first non-agency jumbo mortgage-backed security of the year, a portion of which will include ARMs and significant contributions from EverBank. The real estate investment trust said it is close to being able to issue one non-agency MBS a month this year, up from six in all of 2012. Sequoia Mortgage Trust 2013-1 largely includes characteristics common to other recent Redwood deals, including 7.30 percent credit enhancement for the two tranches set to receive AAA ratings from Fitch Ratings, Kroll Bond Rating Agency and Moody’s Investors Service. However, ARMs have not been included in a Redwood deal since a January 2012 issuance. ARMs will account...
Bank and thrift holdings of home-equity loans declined by 2.5 percent in the third quarter of 2012 compared with the previous quarter, according to the Inside Mortgage Finance Bank Mortgage Database. A significant portion of the holdings remain in a negative equity position, though overall homeowner equity increased in the past year. Banks and thrifts reported $1.11 trillion in total HEL business at the end of the third quarter of 2012, including home-equity lines of credit and closed-end second mortgages held in portfolio, and unused HELOC commitments. The $103.36 billion in CES holdings in the third quarter of 2012 was down 5.8 percent from the previous quarter. Cristian de Ritis, a senior director of consumer credit economics at Moody’s Analytics, said...[Includes one data chart]
Servicers handling portfolio loans and non-agency mortgages continue to increase their use of principal reduction loan modifications, according to the Office of the Comptroller of the Currency. Some 23,335 principal reduction mods were completed in the third quarter, up from 11,178 in the third quarter of 2011 and from 14,944 in the second quarter of 2012. The mods accounted...[Includes four briefs]
A federal appeals court in Washington, DC, has overturned a lower court’s dismissal of a lawsuit accusing the Department of Housing and Urban Development of denying protection for surviving spouses of deceased principal borrowers of reverse mortgages against ejection due to foreclosure. The case, Robert Bennett, et al. v. Shaun Donovan, revealed an apparent inconsistency between HUD regulations and the federal statute that created the FHA’s Home Equity Conversion Mortgage Program. This inconsistency was at the root of the district court’s previous decision to dismiss plaintiffs’ claim for lack of standing, which the ...
Residential Capital, a former subsidiary of Ally and currently in Chapter 11 bankruptcy, has asked the court for permission to sell an estimated $130 million in FHA-insured mortgage loans. ResCap made the request in a recent filing with the U.S. Bankruptcy Court in Manhattan, which monitors and approves all of the beleaguered company’s activities and requests during bankruptcy. According to the company, its unsecured creditors have signed off on the prospective sale of the FHA loans although the court would still have to approve the request during a scheduled hearing on Jan. 16. ResCap sought bankruptcy protection on ...
The agency residential MBS market expanded for the third consecutive quarter during the three months ending in September, according to a new Inside MBS & ABS analysis. A total of $5.39 trillion of single-family MBS issued by Fannie Mae, Freddie Mac and Ginnie Mae were outstanding as of the end of the third quarter of 2012. That was up by a scant 0.2 percent from the previous period, although it was still 0.4 percent below the level at the same time in 2011. Both Ginnie (2.1 percent) and Fannie (0.6 percent) posted...[Includes two data charts]
Merrill Lynch over the past few months has been in the market actively buying jumbo mortgages and is also looking for an executive to manage its correspondent purchases, secondary market officials told Inside MBS & ABS. These officials, who spoke under the condition their names not be used, said they anticipate that Merrill, a Bank of America company, is gathering product for an eventual jumbo security. A spokesman for Merrill declined to discuss the matter, saying, “We don’t comment on our plans.” Shellpoint Partners, a company affiliated with MBS market pioneer Lewis Ranieri, is...
Look for increased volume of new non-agency mortgage-backed securities issuance – and more companies issuing these deals – in 2013, industry analysts say. Underwriting standards could loosen somewhat as investor demand strengthens. Through the beginning of December, $3.46 billion in non-agency jumbo MBS was issued in 2012, according to the Inside Mortgage Finance MBS Database. Redwood Trust accounted for 56.7 percent of that volume, with an affiliate of Credit Suisse Group accounting for the rest ...
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