A federal appeals court in Denver unanimously affirmed a lower court ruling that a claim of damage related to an originator/seller’s misrepresentation accrues when the loan is sold. Ruling in six cases involving plaintiffs Lehman Brothers Holdings and Aurora Commercial Corp. versus Universal American Mortgage Co. and Standard Pacific Mortgage, the Tenth Circuit Court of Appeals rejected plaintiffs’ contentions that their claims were really “indemnification” claims that did not accrue until they bought the loans from Fannie Mae and Freddie Mac. The overarching issue in this complicated case is...
The expected increase in interest rates on some previously modified home mortgages is a slight credit negative for RMBS performance because these loans will re-default at a higher rate, according to analysts at Moody’s Investors Service. However, higher default rates will have only a modest effect on subprime and Alt A RMBS, because only a small percentage of outstanding subprime and Alt A mortgage loans are positioned to experience future rate step-ups. In their research, the analysts found that subprime and Alt A modified loans become delinquent more frequently after a rate step-up. “Modified subprime and Alt A loans with a demonstrated performance history of four to five years become delinquent at a significantly higher rate after a step-up in interest rates than do loans of a similar type and vintage that have not stepped up,” said the analysts in a new report released this week. According to their data, in July 2015, only 2 percent of the modified re-performing subprime loans became...
Paul Hindman, a consultant at Grid Financial Services, had this to stay about the deal: “The more important question is what other mortgage-related companies are on Computershare’s shopping list….”
“When is enough, enough? Paying for past sins, sometimes before they were sins. I’m not speaking specifically about Wells Fargo, but in general.” – Marc Savitt, NAIHP president.
If lenders used the seemingly sensible underwriting standards that were in place in 2001, some 1.2 million more mortgages would have been originated in 2014, according to estimates by the Urban Institute’s Housing Finance Policy Center. Laurie Goodman, director of the HFPC, said lenders have “plenty of room to safely ease credit.” An underwriting index from the HFPC suggests that originators are accepting little risk in terms of borrower or loan characteristics, hindering a recovery in the mortgage market and the broader economy. Lenders note...
For the first time since October 2008, Moody’s Investors Service upgraded two top private mortgage insurance companies to investment grade due to strong performance of new insurance written, cost savings and fewer losses. However, risk factors, including proposed capital regulations from the National Association of Insurance Commissioners, could adversely impact the ratings. Mortgage Guaranty Insurance Corp. and Radian Guaranty now have Baa3 ratings from Moody’s, although other rating servicers appear disinclined to follow. Both MIs continue to be rated below investment grade by Standard & Poor’s. The improved ratings come...
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