Subprime auto lending is just about back to the levels seen before the financial crisis, with increased ABS issuance volumes, somewhat higher credit losses and more credit enhancement to offset declining ABS credit quality, according to new research from Standard & Poor’s Rating Services. While newer subprime auto ABS have more credit risk, ratings are expected to remain stable. During an S&P webinar this week, Amy Martin, a senior director at the rating service, pointed out...
Fannie Mae late last week priced its third credit risk-sharing deal of 2014. The $2.05 billion note is the government-sponsored enterprise’s fourth and largest transaction under its Connecticut Avenue Securities series since the Federal Housing Finance Agency ordered both Fannie Mae and Freddie Mac to shrink the GSEs’ role in the U.S. housing market last year. In its latest offering – Series 2014-C03 – Fannie included reference loans with original loan-to-value ratios of up to 97 percent and “is consistent with prior transactions.” Previous C-deal offerings included reference loans with up to 80 percent LTV ratios. “We’ve continued...
The conditional default rate, or annualized liquidations, of non-agency MBS loans rose 20 basis points to 4.92 percent in the second quarter, after declining for seven consecutive quarters from 9.76 percent in the second quarter of 2012, Fitch Ratings reported this week. “The recent turnaround in the trend can be partly attributed to a growing portion of bank-held real estate owned properties, which typically liquidate much faster than those that are still in the foreclosure process,” said Fitch. The rate of completed foreclosures to REO property has trended higher for four consecutive quarters. The previous decline in the CDR was driven...
While affluent borrowers prefer to obtain mortgage financing from their primary bank, some in this category are willing to shop, particularly when competing lenders offer lower interest rates or more attractive loan products.
“There’s lots of talk of companies being for sale right now,” said Paul Hindman, managing director of Management Advisors Executive Search, “but not too much talk of deals closing.”
Flagstar, a thrift that is also the largest remaining depository in the table funding sector, earned $25.5 million in the second quarter compared to a $78.9 million loss in 1Q.
One critic of the report on nonbank risk had this to say: “It’s just ridiculous what they [the IG] get away with. There’s risk in every business. Don’t they get it?”
Criticisms about servicing seem to be stubbornly resistant to much improvement, however, hovering in the 3,000 to 4,000 range for the last six quarters.
The audit is being conducted by HUD’s Office of Inspector General to assess the bank’s compliance with FHA requirements related to the origination of loans insured by the agency.
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