The Treasury Department approved $10.0 million in federal funds this month for a limited pilot of a program to allow non-agency borrowers with negative equity to refinance. The program in Oregon’s Multnomah County includes characteristics of a proposal from Sen. Jeff Merkley, D-OR, who said the pilot could create a national model. The Oregon Housing and Community Services Department will use money from the Hardest Hit Fund to help non-agency mortgages with loan balances up to $250,000 and ... [Includes one brief]
FCI Lender Services ended December with $2.3 billion of private money loans in its servicing portfolio, a 27 percent gain from the same period a year earlier. The nation’s largest private money servicer said it is seeing an increase in contracts and growth in “soft money” loans backed by residential real estate. Gordon Albrecht, chief strategy officer at FCI, said soft money loans currently account for 50 percent of the firm’s business, which is based in Anaheim, CA. “That’s a record for us,” ...
The $25 billion national servicing settlement has prompted an increase in principal reduction loan modifications on non-agency mortgages, according to the Treasury Department. However, most of the servicers participating in the settlement have not yet met their principal reduction obligations. Last week, the Treasury said servicers have increased their use of principal reduction outside of the Home Affordable Modification Program’s Principal Reduction Alternative due to the ... [Includes one data chart]
The Consumer Financial Protection Bureau will closely monitor sales of servicing, particularly to nonbanks, and require new contingency plans from servicers, the agency announced last week. The new scrutiny was prompted by complaints from borrowers as nonbank special servicers have increased their purchases of servicing in recent years. “The CFPB will, in appropriate cases, require servicers engaged in significant servicing transfers to prepare and submit written plans to the CFPB detailing how they will ...
The amount of subprime mortgages outstanding continues to fall, although performance leveled off in 2012 after significant declines in delinquencies beginning in 2010. Some $475.0 billion in subprime mortgages were outstanding at the end of 2012, according to estimates by Inside Nonconforming Markets, down 12.8 percent from the end of 2011. Only two major subprime servicers increased their subprime mortgage holdings in 2012 compared with the end of 2011: Ocwen Financial and ... [Includes one data chart]
The ability-to-repay rule from the Consumer Financial Protection Bureau will not have a negative impact on First Republic Bank’s originations of interest-only mortgages, according to James Herbert, chairman and CEO of the bank. Officials at Redwood Trust also said the rule is unlikely to impact its acquisition and securitization of IOs. If anything, First Republic’s Herbert said the new rule from the CFPB, which included harsher treatment for IO originations beginning in 2014, could help increase ...
Redwood Trust plans to more than triple the dollar amount of non-agency jumbo mortgage-backed securities it issues this year compared with its issuance from 2012, according to comments this week from officials at the real estate investment trust. Redwood also plans to securitize conforming jumbos and even aggregate conforming loans to sell to Fannie Mae and Freddie Mac. The REIT’s goal for 2013 is to issue about $7.0 billion in non-agency MBS. While potential competitors struggled to ...
Banks are likely to pursue more bulk sales this year and the next to rid their books of nonperforming real estate assets, which could attract investors looking for better yield, according to Fitch Investors Service. Successful bulk sales will allow more banks to concentrate on their core banking services, while reducing their costs of holding nonperforming real estate loans on their balance sheets, said Fitch analysts. Sales at banks with high volumes of nonperforming commercial-related loans also are expected to pick up over the next 12 to 18 months, particularly as many commercial real estate (CRE) loans originated before the financial crisis near maturity, they added. Investors such as hedge funds, high-yield asset managers and other lightly regulated entities seeking higher returns in a low interest-rate environment have caused...
Moody’s Investors Service and Fitch Ratings have downgraded the senior unsecured and issuer default ratings of The McGraw-Hill Companies, parent of Standard & Poor’s, to below A-level ratings with a negative outlook. The downgrades are largely due to the Department of Justice’s recent lawsuit regarding ratings of collateralized-debt obligations and rating models for non-agency MBS. “The Baa2 rating balances the company’s history of prevailing in its legal defenses against the potentially substantial negative credit effects that could result from adverse litigation or settlement outcomes,” Moody’s said after downgrading McGraw-Hill’s senior unsecured rating from A3 late last week. “In addition, the management focus and direct costs involved in defending litigation may be a persistent drag on the company’s operations over the intermediate term.” Moody’s said...
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