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Inside Nonconforming Markets

October 31, 2008

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Non-Prime MBS Issuance Hits Record Low in Third Quarter of 2008: Zero

There was no issuance of subprime, Alt A or “other” non-prime mortgage backed securities in the third quarter of 2008, the first blank quarter since the creation of the non-prime MBS market, according to the Inside Mortgage Finance MBS Database. The sector is not expected to rebound anytime soon, and analysts suggest that the non-prime market is unlikely to... [Includes one chart] Read More

Concern Mounts Regarding TARP Asset Purchases

As banks receive equity investments, the asset-purchase portion of the federal government’s Troubled Assets Relief Program is still moving toward the launch pad. Some analysts fear that the asset purchases will focus on the same institutions that receive equity injections, limiting the program’s scope and potential benefits.Four weeks after President Bush signed the legislation that... Read More

HUD Officials Detail H4H Complications

The refinance program for troubled borrowers foisted on the Department of Housing and Urban Development by Congress received tepid reviews from HUD officials. Officials from the FHA continue to raise doubts about how many lenders and borrowers will participate in the recently implemented HOPE for Homeowners program due to the program’s tough standards. At an audio conference hosted by... Read More

Servicers, Government Battle Over Loss Mitigation

Policymarkers continue to push servicers to increase their help for troubled borrowers, and investors holding the mortgages continue to push back. The rift regarding the best solutions for dealing with troubled borrowers is a “holy war,” according to Larry Platt, financial services practice area leader at K&L Gates. “The public berating of loan servicers and loan holders for not... Read More

Non-Prime Mods Increase, but Not for GSEs

Subprime loan modifications continue to increase on a quarterly basis, according to the Hope Now Alliance. However, loss mitigation on nonprime mortgages held by Fannie Mae and Freddie Mac decreased before the federal government forced the companies into conservatorship. Some 187,161 subprime modifications were completed by Hope Now servicers in the third quarter of 2008, more than... Read More

Cramdowns a Real Possibility, Lobbyists Warn

The mortgage industry’s year-long fight to stop bankruptcy judges from reducing mortgage debt for troubled borrowers is near an end, according to industry lobbyists. At the Mortgage Bankers Association’s annual convention last week in San Francisco, three lobbyists suggested that Congress could approve cramdown provisions in November. “It is likely to get crammed down us without advocacy... Read More

Alt A MBS Hit With Subprime-Like Downgrades

The rating services are finishing their reviews of Alt A mortgage-backed securities with results similar to those seen in the subprime sector. AAA classes have held up relatively well as lower tranches suffer major downgrades. Last week, Standard & Poor’s lowered its ratings on 760 classes of 85 Alt A MBS and in recent months Moody’s Investors Service initiated... [Includes one graph] Read More

Cautious Optimism for Reverse Mortgage Growth

The FHA’s fiscal year ended last month with another record year for home-equity conversion mortgages, the dominant reverse mortgage product. Some 112,100 HECMs were originated in fiscal 2008, up from 107,558 the previous year and more than double the production seen in 2005. “Reverse mortgages are really one of the only positive stories in financial services this year because they provide... Read More

News Briefs

Last week, the Federal Reserve approved final amendments to reporting rules under the Home... A group of close to 100 protestors gathered outside of the Mortgage Bankers Association’s annual... Fannie Mae this week reinstated a requirement for homeownership counseling and education for first-time... BasePoint Analytics recently released a version of its fraud detection program aimed at... Read More

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