Several hard money lenders are involved in financing flippers, charging interest rates that are several percentage points above the going Fannie Mae/Freddie Mac rate.
With the April acquisition of Home Loan Servicing Solutions’ assets and liabilities, New Residential gained a significant portion of the clean-up call rights for outstanding non-agency MBS. Officials at the real estate investment trust said New Residential plans to execute the call rights and acquire more rights as the MBS feature presents strong profit potential. New Residential owns the clean-up call rights on more than 2,100 non-agency MBS with an outstanding balance of about $235 billion. That’s about 34 percent of the non-agency MBS market. “This should be...
The Federal Housing Finance Agency surprised no one when it announced a fifth, and final, extension of the Home Affordable Refinance Program for underwater Fannie Mae and Freddie Mac loans. But industry experts are intrigued by the prospect of a new streamlined refi program for the two government-sponsored enterprises. Analysts from Barclays said an extension was widely expected by the market and, as a result, “may not have much of an effect on seasoned cohort valuations.” FHFA Director Mel Watt announced...
The CFPB this week launched a public inquiry into student loan servicing practices that create repayment challenges, hurdles for distressed borrowers and economic incentives that may affect the quality of service. “As a growing share of student loan borrowers reach out to their servicers for help, the problems they encounter bear an uncanny resemblance to the situation where struggling homeowners reached out to their mortgage servicers before, during and after the financial crisis,” CFPB Director Richard Cordray said during a field hearing in Milwaukee on Thursday. “Having seen the improper and unnecessary foreclosures experienced by many homeowners, the CFPB is concerned that inadequate servicing is also contributing to America’s growing student loan default problem.” Currently, about 8 million Americans are...
ABS issued in recent years have included a marked increase in the use of electronic contracts, particularly for prime auto deals. Industry analysts note that e-contracts can be treated similarly to physical contracts, though issuers must address concerns from investors, lenders and rating services. “The pace of e-contract adoption has increased, and some prime auto captives are believed by industry participants to be moving to 100 percent e-contract origination by the end of 2015,” DBRS said this week. “The adoption of e-contracts has also occurred across the ABS industry, with subprime auto and timeshare lenders beginning to use them for loan originations.” Use of e-contracts in the auto space has been boosted...
Republicans in the House of Representatives continued their efforts to chip away at the Dodd-Frank Act during a hearing this week by rolling out critics who said the act not only was a poor and ineffective response to the 2008 financial crisis, but also created a host of new problems and could be contributing to the next debacle. Rep. Sean Duffy, R-WI, chairman of the House Financial Services Oversight and Investigations Subcommittee, said a major assumption underlying Dodd-Frank – that the primary cause of the financial crisis was misbehavior by securities market participants – was false. “Main Street lenders are being...
Privately held nonbank mortgage firms – and even some public ones – increasingly are contemplating issuing more debt securities as a way to fund growth. The reliance on debt is seen as a more attractive alternative than going public, which can leave too much of a young company in the hands of outside parties that are merely looking for a quick profit after a lender lists its stock. Then again, not too many mortgage companies are contemplating...
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