Cart

Inside Nonconforming Markets

February 13, 2009

View Archived Issues

Federal Government Moves to Aid Non-Prime Servicers and Possibly the Secondary Market

The Obama administration this week said it will commit $50 billion to prevent “avoidable” foreclosures as part of a renovation of the Troubled Asset Relief Program. The Treasury Department and the Federal Reserve are also considering expanding an asset-backed security purchase program to include non-agency mortgage-backed securities. Treasury Secretary Tim Geithner said further details... Read More

GSEs All But Avoid Alternative Mortgage Products

Fannie Mae and Freddie Mac shunned the alternative mortgage market in January, a trend with no end in sight. At the American Securitization Forum’s annual meeting this week in Las Vegas, mortgage industry participants lamented the demise of the alternative mortgage market. The government-sponsored enterprises pooled only... [Includes one chart and one graph] Read More

Freddie Mac Tests Alt A Servicing Program

Freddie Mac launched a pilot program for troubled “high-risk” mortgages last week as the government-sponsored enterprise continues to expand its loss mitigation efforts. The GSE is also offering a rental option to foreclosed borrowers. Freddie will partner with third-party servicers on its “Workout Strategy for High-Risk Loans” pilot. Initially, the pilot will target... Read More

Fannie Mae Eases Guidelines on Investor Mortgages

In a move aimed at “providing financing opportunities for high-credit quality, bona fide investors,” Fannie Mae announced a loosening of its guidelines on investor mortgages last week. Whole loans under the new guidelines may be purchased or delivered into MBS on or after March 1. The government-sponsored enterprise will more than double the number of mortgages it will allow investors... Read More

Non-Prime MBS Downgrades Continue

Standard & Poor’s and DBRS took further whacks at non-prime mortgage-backed security ratings last week, mostly downgrading tranches that were already below investment grade. The extremely poor performance of MBS issued between 2005 and 2007 caused the downgrades. S&P downgraded 737 subprime MBS classes from 516 securities. Some 99.73 percent of the ratings were lowered from... Read More

TARP Recipients Detail Their Lending Activities

Citigroup revealed last week that it has used a portion of the funds it received from the Troubled Asset Relief Program to originate jumbo mortgages. Executives from seven other companies that received TARP funds also testified before the House Financial Services Committee this week, but Citi was by far the most forthcoming about its mortgage-related TARP activities. Citi received... Read More

Re-Default Rate Questioned by State Regulators

A group of state attorneys general and banking regulators questioned re-default rates reported by federal regulators and called for an increase in affordable loan modifications last week. The action, led by the State Foreclosure Prevention Working Group, reignites a battle between states and federal regulators centered on loss mitigation. A recent report by the Office of the Comptroller of... Read More

No Consensus on Effects of Non-Prime Cramdowns

As legislation to allow cramdowns moves through Congress, the industry, community advocates and analysts continue a polarizing debate with little noticeable middle ground. Democrats in Congress are poised to approve cramdown legislation despite strong Republican opposition. The Center for Responsible Lending last week issued an “action alert” urging its supporters to contact their... Read More

Benefits of Large Principal Reductions Questioned

Loan modifications that reduce principal balances by at least 20.0 percent exhibit higher re-default rates than loans with principal and interest payment reductions of 20.0 percent or more, according to a preliminary analysis by Fitch Ratings. “The data indicate that decreases in principal and interest payments at modification cause distinct decreases in re-default rates... Read More

HELOC and ARM Disclosure Changes a Concern

The mortgage industry recently raised concerns about potential changes to disclosures for home-equity lines of credit and ARMs. Comments on the Federal Reserve’s implementation of the Mortgage Disclosure Improvement Act were due earlier this week. Congress included the MDIA in the Housing and Economic Recovery Act of 2008, which became law in July 2008. The MDIA amends the Truth in... Read More

News Briefs

Citigroup last week said it will sell a $37.0 billion portfolio of subprime mortgages... The American Securitization Forum this week proposed increasing disclosures to... The House Financial Services Committee last week approved legislation to protect... Another private-equity fund announced its intention to purchase non-performing... Read More

Latest Imf News

More Imf News

Featured Data

More Featured Data

Featured Reports

More Latest Reports

Featured Poll

As homeowner equity continues to build, more and more lenders are launching home equity lending products. Are you thinking of joining this market?

View Results