There are signs of trouble ahead for the subprime auto ABS sector that warrant closer attention to the financial health of that class of borrowers, but it looks like the rising risk is contained, according to some research reports published this week by a pair of Wall Street analysts. In one of the reports, Wells Fargo Securities analysts John McElravey and Ryan Brinkoetter warned of the implications for the fiscal soundness of the borrowers involved. They reviewed the total and voluntary prepayment rates of the major subprime auto ABS issuers, and calculated the average prepayment curves by deal age for issuer and vintage over the 2013-2016 time period. “Much of the analytical focus in auto ABS has been...
The credit landscape is improving as more lenders introduce new credit-scoring mechanisms and eligibility requirements, but it may not mean much for mortgage origination volume, at least in the short term, according to a new study by mortgage consulting firm the Stratmor Group. The study noted that when faced with slower housing growth due to demographics, affordability, and higher healthcare costs, lenders will look to loosen underwriting standards to feed their production capacity. Rob Chrisman, senior advisor with Stratmor, said many of the “good borrowers” have refinanced and bought homes already, leaving lenders with borrowers of lesser credit quality. “Lenders and investors, too, are...
Four whole-business securitizations totaling $3.58 billion are in the works, according to presale reports, including a $900.0 million deal from Coinstar. The securitization from Coinstar received a preliminary BBB rating from Kroll Bond Rating Agency. The company owns nearly 20,000 kiosks that count change located in grocery stores and other retail venues, mostly in the U.S. The company generates...
Ginnie Mae is making enhancements to a tool developed for MBS issuers to help them compare their performance with other issuers and to determine whether they are meeting agency expectations. Improvements to the Issuer Operation Performance Profile (IOPP) tool also would increase scoring transparency and make reports clearer and easier to understand, the agency said. The IOPP was introduced...
VantageScore is gaining traction as an alternative to FICO credit scores in consumer lending and structured finance, according to a study by DBRS. Introduced in 2006 as a joint venture among three national credit bureaus – TransUnion, Experian and Equifax – VantageScore was first used in securitization transactions backed by student-loan refinancings. Its transition to consumer loans and structured finance demonstrates industry acceptance as an alternative to the widely used FICO scores, DBRS pointed out. The study compares...
More first-lien mortgages are originated through retail lending operations than either of the other main production channels, but correspondents gained some ground during the first quarter. An exclusive Inside Mortgage Trends analysis of survey data shows that the market share for correspondents rose in all three major loan categories: conventional conforming, jumbo and government insured. Correspondents have their deepest penetration in ... [Includes two data charts]
Mortgage banking remained profitable for the vast majority of banks and thrifts that are in the business, but earnings declined sharply in early 2017 and more institutions quit the market, according to a new Inside Mortgage Trends analysis of call reports. The industry reported a combined $3.562 billion in mortgage-banking income for the first quarter of this year, down 35.0 percent from the previous three-month period. The upside was that first-quarter profits ... [Includes one data chart]
There’s plenty of talk in mortgage technology circles of e-mortgages, re-imagining the loan origination process and digitizing back-office operations, but what about the regulatory, supervisory and examination front? During a recent interview with Inside Mortgage Trends, Sharif Mahdavian, vice president of national sales at ComplianceEase, a leading industry vendor, revealed that regulators are increasingly moving to an “e-examination” phase to augment their current level of ...
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