Home-price depreciation was a greater driver of mortgage defaults during the financial crisis than unemployment, according to an analysis by S&P Global Ratings. The findings are counterintuitive because many borrowers continued to make mortgage payments when they experienced negative equity while the lack of employment can make it difficult to keep up with a mortgage. S&P studied loan-level data from the government-sponsored enterprises for mortgages ...
The end of a long-term decline in interest rates will trigger a resurgence of the second-lien market and alter the mortgage market in other areas as well, according to a working paper published by the Urban Institute. How much mortgage rates will rise is unclear, but the 35-year secular decline in interest rates is over, author Laurie Goodman maintained in her preliminary study, “The Impact of Higher Interest Rates on the Mortgage Market.” Goodman, co-director of UI’s Housing Finance ...
Wells Fargo – the nation’s largest home lender and servicer – has apparently won the bid for Seneca Mortgage and its $53.6 billion servicing portfolio, sending shockwaves through the market. But as Inside Mortgage Finance went to press this week, the jury was still out on whether this was a “one-off” opportunistic purchase or, perhaps, the start of a trend toward depositories showing renewed interest in mortgage servicing rights. For now, Wells isn’t...
Federal banking regulators announced this week that capital requirements set to take effect in January for all but the biggest banks would be suspended under a proposed rule. The proposal applies to Basel III capital requirements for mortgage servicing rights, among other items. The regulators said they are developing a proposal that would simplify capital rules to reduce regulatory burden, particularly for community banks. The proposed suspension generally applies to banks with less than $250 billion in total assets. Thomas Hoenig, vice chairman of the Federal Deposit Insurance Corp., said...
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