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Inside Nonconforming Markets

September 26, 2008

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GOP Lawmakers Balk at Bush Plan to Boost MBS Markets

A Bush administration proposal to supply $700 billion of liquidity for subprime mortgage securities and other “troubled” assets ran into stiff opposition by Republican lawmakers who want the government to consider other options to stave off a potential collapse of financial markets. Democrats on Capitol Hill late this week appeared to have reached agreement with Treasury... Read More

Hope for Homeowners a ‘Last Resort’ for Servicers

The federal government’s $300 billion rescue program for troubled borrowers might not get much use. At a House Financial Services Committee hearing last week, subprime servicers noted that the principal writedown required under the program will be a major impediment to participation. “The reduction of principal – which presents generally the greatest loss to the investor... Read More

FHASecure Helped Fewer Than 4,000 Borrowers

Even though the mortgage industry suggests that FHASecure is more flexible and attractive to servicers than the Hope for Homeowners program, few troubled borrowers have refinanced into an FHASecure loan. A year after FHASecure’s introduction, only 3,736 delinquent conventional borrowers had refinanced into an FHA mortgage through the end of August, according to the Department of Housing and... Read More

Fair Value Accounting Halt Floated as Subprime Fix

While the federal government struggles with how to prop up the mortgage market, some have suggested that the best fix could be to suspend certain accounting rules that potentially overstate lenders’ subprime losses. Proponents of the move note that it would cost taxpayers nothing. “I have some ideas, including a re-evaluation of mark-to-market accounting,” said Sen. Mike Enzi... Read More

Proposed Bailout Prompts Revived Calls for Cramdown

Democrats in Congress revived an incendiary cramdown proposal this week during the debate over a proposed $700 billion troubled asset repurchase plan. Lenders maintain their strong opposition to the cramdown proposal, which would allow bankruptcy judges to modify mortgages. The Mortgage Bankers Association’s COO John Courson said the provision would be “wholly unproductive... Read More

Countrywide Was Top High-Rate Lender in 2007

A ranking of high-rate lenders from newly available Home Mortgage Disclosure Act data harkens back to brighter days for the subprime market, when the mortgages were still being widely originated. Countrywide Financial was the top high-rate lender in 2007, according to an Inside B&C Lending analysis of HMDA data. High-rate loans, the Federal... [Includes one chart] Read More

Subprime Modifications Begin To Top Repayment Plans

Subprime servicers are increasingly using loan modifications in lieu of repayment plans to help troubled borrowers. More modifications were completed than repayment plans for the first time this summer, according to data from the HOPE NOW Alliance and federal regulators.While the data sources conflict regarding the volume of subprime loss mitigation completed by... Read More

B&C News Briefs

The collapse of Washington Mutual late this week creates a new juggernaut in the subprime servicing business. It’s not a ... Ocwen Financial announced this week that it received a patent for its electronic invoice management system. The subprime... Vantium Capital, a mortgage investment company, this week acquired the assets of special servicer Acqura Loan Services and two... Read More

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