The company formerly known as Option One reached a $28.2 million settlement with the Securities and Exchange Commission this week regarding issuance of subprime mortgage-backed securities in early 2007. The SEC said Option Ones MBS operated as a fraud or deceit against non-agency MBS investors. The offering documents misled investors about Option Ones precarious financial condition and, hence, its inability to fulfill its obligations on its own to repurchase ...
A subsidiary of Credit Suisse Group issued a $741.94 million non-agency jumbo mortgage-backed security at the end of March, the first jumbo issuance by a company other than Redwood Trust since 2008. CSMC Trust 2012-CIM1 included some unique characteristics prompting criticism from Fitch Ratings and speculation about whether Credit Suisse will issue more non-agency MBS. Standard & Poors and DBRS placed AAA ratings on the senior bond in the privately-placed deal based on 8.00 percent credit enhancement. Fitch which was paid to provide feedback on the deal but ultimately was not selected to rate the deal said the credit enhancement for the AAA tranche should have been 9.75 percent ...
Springleaf Finance completed another subprime mortgage-backed security comprised of vintage performing loans this week, its second such MBS in eight months. However, the firm is facing significant financial difficulties and stopped offering mortgages at the beginning of the year. The $473.01 million subprime MBS received a AAA rating from Standard & Poors, just like Springleafs $496.86 million subprime MBS in September. As with the previous security, the latest MBS was backed by seasoned performing loans, an average of six years-old in this case ...
Ocwen Financial last week completed its acquisition of mortgage servicing rights from Morgan Stanleys Saxon Mortgage Services. Ocwen won some concessions from the seller since the sale was announced in October, though the servicer also faces criticism regarding its expanding portfolio. Ocwen acquired MSRs with an unpaid principal balance of $22.2 billion, largely comprised of non-agency mortgages. Ocwen had been subservicing $9.9 billion of the MSRs. Ocwen also acquired $2.7 billion in subservicing agreements from Saxon. The base purchase price for the Saxon transaction was ...
First Republic Bank the primary source of loans for Redwood Trust non-agency mortgage-backed securities has received high marks for its jumbo originations. FRBs originations are concentrated around San Francisco, largely for wealthy borrowers. After relying on CitiMortgage for all of the loans in its first post-bust non-agency MBS issuance, Redwood has relied heavily on FRB. The lender accounted for a slight majority of the four securities totaling $1.41 billion Redwood has issued in 2011 and at the beginning of 2012 ...
Shortly after being acquired by Capital One Financial, jumbo lender ING Direct announced last week that it will exit the wholesale business. However, Capital One stressed that the lender will continue to offer jumbos on a retail basis. ING Bank was the sixth-ranked non-agency jumbo lender in 2011, according to Inside Nonconforming Markets, with an estimated $5.04 billion in such originations. That was down 26.9 percent from the previous year. A spokesman for Capital One said exiting wholesale lending will allow Capital One to ...
Subprime lending standards appear to be loosening across numerous asset classes, including home loans, but it is still difficult for borrowers to get a subprime mortgage. Equifax recently reported that subprime originations have grown as of the end of 2011 compared with the end of 2010. The companys National Consumer Credit Trends Report was produced with Moodys Analytics, and included details on credit cards, auto finance, consumer finance, retail credit and student loans. The evidence of increased lending to subprime consumers demonstrates banks ongoing efforts to ...
The $25 billion servicing settlement involving five major bank servicers was approved by the US District Court for the District of Columbia on April 4 without a formal challenge from the Association of Mortgage Investors or anyone else. The servicers and settlement monitor Joseph Smith will agree on deadlines to implement the settlements various provisions, with the deadlines to be set between 60 days after approval of the settlement and up to 180 days after approval ... [Includes four briefs]
Prudential Financial last week utilized a unique hybrid MBS/covered bond structure to finalize a $1.0 billion bond secured by vintage subprime MBS. Standard & Poors, which gave Prudential Covered Trust 2012-1 an A rating, said the original balance of the MBS was approximately $2.8 billion. Proceeds from the sale of the notes are being used to buy a pool of MBS from Prudential Insurance. The issuer will then sell investors the Class A notes and the proceeds will be passed through to Prudential Financial. The underlying certificates are expected to generate sufficient cash flows to make the...
A mere 4.7 percent of repurchase demands on loans in non-agency mortgage-backed securities have been resolved, according to a new analysis by Inside Nonconforming Markets. The $352.7 million in completed repurchases account for a small portion of the up to $64.18 billion in recoveries analysts estimate non-agency MBS investors could see from representation and warranty issues. According to new filings with the Securities and Exchange Commission, $7.45 billion in repurchase demands on non-agency MBS had been made as of the end of 2011. The first-time reports were filed by securitizers that are still in business and did not include heavyweights such as Bear Stearns, Countrywide Financial, IndyMac, Lehman Brothers and Washington Mutual ... [Includes one data chart]