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Inside Nonconforming Markets

April 2, 2010

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Jumbo Originations Increase in 2009, Agency Mortgages Account for Half of Production

Agency jumbo mortgage originations more than doubled in 2009 while non-agency jumbo originations decreased slightly, according to a new ranking and analysis by affiliated publication Inside Mortgage Finance. The agency share of total jumbo originations increased to 51.7 percent in 2009, up from a 26.6... [Includes one chart and one graph] Read More

HAMP Revisions Positive for Non-Agency Market

The Obama administration’s new focus on principal forgiveness is “very positive” for the non-agency mortgage-backed security market, according to analysts at Amherst Securities Group. The changes to the Home Affordable Modification program and an FHA refinance option announced last week will likely reduce re-defaults, though loss mitigation is expected to slow as servicers implement... Read More

Alt A MBS Issuance Includes Investor Protections

A privately-placed issuance this week of an Alt A mortgage-backed security reveals the stringent concessions non-agency investors want from issuers. The securitization – American General Mortgage Loan Trust 2010-1 – is backed by a pool of about $1 billion seasoned Alt A, first lien, fixed-rate mortgages with a weighted-average credit score of 715. All of the borrowers in the... Read More

Option ARM Mods Declined at the End of 2009

Option ARM delinquencies continue to increase, but option ARM modifications actually declined in the fourth quarter of 2009 compared with the previous quarter, according to an Inside B&C Lending analysis of data released by federal regulators. Option ARM delinquencies increased to 33.8 percent at the end of 2009 from 32.3 percent the previous quarter and from 23.4 percent... Read More

BofA Settlement Prompts Principal Forgiveness

Bank of America announced last week that it will first use principal forgiveness – ahead of an interest rate reduction – when modifying certain subprime, option ARM and prime two-year hybrid mortgages. The announcement followed a settlement between Massachusetts Attorney General Martha Coakley and Countrywide Financial. BofA will apply an “earned principal forgiveness” approach on... Read More

Lenders’ Yields Hampering Non-Agency Revival

Investors are ready to purchase non-agency mortgage-backed securities, but interest rates will apparently have to increase to make issuance worth it for lenders. Investors predict that it could be a year before significant issuance of non-seasoned non-agency MBS resumes. At a securitization seminar last week hosted by the American Securitization Forum, Dan Castro, a partner at... Read More

Congress Debates Push for ‘Thin Credit’ Lending

Rep. Jeb Hensarling, R-TX, is concerned that Democrats in Congress are going to push the credit bureaus to rate borrowers with thin credit files or force lenders to expand credit access to underserved borrowers. At a hearing last week by the House Financial Services Committee’s Subcommittee on Financial Institutions and Consumer Credit, Hensarling warned against expanding... Read More

Fed Allows Alternative to Risk-Based Pricing Notice

Lenders that engage in risk-based pricing will soon be required to provide borrowers with additional disclosures, according to a new rule issued by the Federal Reserve and the Federal Trade Commission. However, the federal regulators will allow lenders to provide borrowers their credit score in lieu of a risk-based pricing notice.In January, the regulators issued final rules to... Read More

HAMP Led to Intentional Owner-Occupied Defaults

Mortgage defaults on owner-occupied properties spiked in comparison to investor properties after the introduction of the Home Affordable Modification Program, according to analysts at Amherst Securities Group. “We believe this difference can be attributed to a simple fact: the benefits from the recent set of borrower-friendly actions disproportionately favor owner-occupied... Read More

News Briefs

The Senate Committee on Banking, Housing, and Urban Affairs quickly approved financial reform legislation... CitiFinancial last week agreed to pay $1.25 million to a group of state mortgage regulators for failing... BBVA Compass recently launched a mortgage product for first-time homebuyers. The Alabama-based commercial bank... Read More

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