When rates spiked this week, margin calls to MBS investors increased. Lenders are nervous but next will will be the real test, mortgage executives told Inside Mortgage Finance.
The amount of home mortgage debt outstanding continued its post-crisis downward spiral in the early months of 2013, although the agency servicing market grew slightly, according to a new analysis and ranking by Inside Mortgage Finance. The Federal Reserve reported total home mortgage debt outstanding of $9.868 trillion as of the end of March, down 0.6 percent from the previous quarter. Under pressure from falling house prices and the collapse of the non-agency market, the supply of MDO has been in steady decline since peaking at its all-time high of $11.195 trillion at the end of 2007. Single-family servicing associated...[Includes two data charts]
In addition to having the most failed metrics, CitiMortgage was found to be in widespread noncompliance with the timeliness requirement to notify a borrower of any missing documents in his modification application.
The treatment of balloon loans under new federal rules is one example where regulation is taking a broad brush approach that disadvantages community banks.
Lewis Ranieri, one of the inventors of the non-agency mortgage-backed security, said there are currently a lack of viable alternatives to agency mortgages.