The first rated securitization backed by nonperforming Home Equity Conversion Mortgage loans contains strong, credit-positive features that outweigh the credit risk associated with nonperforming loans, according to a Moody’s Investors Service analysis. The effect of some of these positive features on the performance of Nationstar HECM Loan Trust 2015-2, however, depends on whether Nationstar Mortgage remains as servicer for the transaction, said the rating agency. Nationstar has a servicer rating of B2/Stable from Moody’s and is also the transaction’s sponsor. Nationstar issued NHLT 2015-2 in November 2015 and by the end of December, the first remittance report showed strong initial performance. Credit enhancement to the Aaa (sf)-rated notes increased by 1.69 percent in the first month of operations, Moody’s noted. “As long as Nationstar continues to be the ...
Radian Guaranty became the first among seven private mortgage insurers to declare compliance with the regulatory capital standards under the Private Mortgage Insurer Eligibility Requirements (PMIERs). Radian met its PMIERs goals after receiving $325 million in cash and marketable securities from its parent Radian Group in exchange for a surplus note. In addition, the parent firm contributed $50 million to an exclusive affiliated reinsurer of Radian Guaranty. Radian Group expects the capital cushion to increase based in part on expected future financial performance at its MI subsidiary. Monies from other sources, including a profit commission of about $8 million based on performance to date, and $8.5 million in prepaid supplemental ceding commission also contributed to the MI’s capital. Hence, Radian Guaranty is not expected to require any additional capital contributions in order to ...
Quicken Loans’ S&P Rating Unaffected by Lawsuit Dismissal. Standard & Poor’s said a federal judge’s decision to dismiss a lawsuit by Quicken against the Department of Justice has not affected the lender’s ratings. According to the rating agency, Quicken’s rating remains at BB/Stable. Quicken’s lawsuit claimed that the government altered the method in which the FHA reviews loans and pressured the company to pay an “inexplicable penalty.” Although the penalty may be “inexplicable” in relation to the alleged violations, it would not be enough of a justification to alter Quicken’s current rating, S&P said. To affect the rating or outlook on Quicken, the penalty would have to be in the hundreds of millions of dollars or have severe restrictions on the types of mortgages Quicken could continue to originate, S&P explained. However, S&P believes such ...
Residential lenders issued a record $435.8 billion of Ginnie Mae securities in 2015, according to Inside MBS & ABS, a handsome 47 percent increase from the prior year.
Quicken Loans is considering its next move – possibly a change of litigation venue – following last week’s ruling by a Michigan federal district court dismissing the lender’s lawsuit against the Department of Housing and Urban Development and the Justice Department for failure to state a claim. The lawsuit, which challenged the DOJ’s use of the False Claim Act and HUD’s use of statistical sampling in post-endorsement loan reviews, was filed in April 2015, a week before the DOJ sued Quicken for allegedly filing false claims on FHA mortgages and other violations. Quicken’s lawsuit claimed...
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