With the secondary market unwilling to purchase subprime mortgages this year, lenders looking to make loans to lower-credit borrowers have turned to the FHA. The program does not have a minimum required credit score, making it a good outlet for such production, but many are far from happy with “the new subprime.” A number of subprime lenders have migrated to FHA lending and admit that they...
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Freddie Mac and Fannie Mae reduced their exposure to subprime mortgage-backed securities again in the second quarter of 2008, according to an analysis by Inside B&C Lending. Subprime MBS held by the government-sponsored enterprises fell to $92.77 billion in the period, down 8.3 percent from the previous quarter and 35.0 percent from the end of 2007... [Includes one chart]
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A number of major subprime servicers have until the end of August to detail their preparations for an impending FHA-led borrower bailout program at the request of House Democrats. The request follows a directive from Rep. Barney Frank, D-MA, chairman of the House Financial Services committee, that servicers cease foreclosures on borrowers potentially eligible for the program until its...
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The conditions put on a sale of “unfair” loans originated by Fremont Investment and Loan in Massachusetts set a troubling precedent, according to industry analysts. The requirements apply only to the sale of 200 Fremont loans, but they could be used as a costly template for resolving future disputes. Earlier this year, WMD Capital Markets, a California-based specialty investment company...
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Freddie Mac recently completed its second wrap of seasoned mortgages this year. The $48.9 million resecuritization consists largely of subprime MBS issued by Option One Mortgage between 1999 and 2001.JPMorgan Chase, the underwriter of the Structured Pass-Through Certificates T-081, will sell the securities to other investors. Freddie’s “wrap” program had been a key tool in the...
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Looking to the past to predict future performance, Moody’s Investors Service this week is unveiling a new subprime mortgage-backed security rating model. Roger Stein, managing director of research and analytics for Moody’s, said the model could spur subprime MBS issuance. “While the current credit environment continues to evolve, the enhanced simulation tools and new econometric models...
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Subprime mortgages look to be a strong target for buyers of distressed assets, though billions of investment dollars continue to wait for prices to drop. Analysts at PricewaterhouseCoopers suggest that private-equity firms, strategic acquirers and foreign investors are the prime candidates to purchase subprime mortgages. “The uncertainty following the credit crisis and the realization...
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An analysis of subprime originations from recent years suggests that subprime lending was heavily concentrated in fast-growing parts of the country with considerable new construction. The locations also saw house prices rise at faster-than-average rates, though a direct link between subprime lending and home price depreciation is debated.A study by Chris Mayer, senior vice dean at Columbia...
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Beginning Sept. 6 in California, some foreclosure trustees or their authorized agents will be required to post a notice, at the same time they post a notice of sale, and mail that notice to the... Only seven banks of the 83 covered by a Federal Reserve survey said they were still involved in subprime lending, and six said they had tightened standards in the first quarter of 2008...
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