The clock is ticking on the phrase-out of the London Interbank Offered Rate, or LIBOR, a benchmark the mortgage market has relied on for the past few decades. Now comes the debate: is it something to worry about or no big deal? A new report from Bank of America Merrill Lynch suggests that when it comes to MBS at least, the changes will be felt, depending on the sector. “Certain agency MBS cash flows will be impacted directly,” BAML notes. “For example, underlying cash flows on LIBOR-indexed hybrid ARMs may change if an alternate index is chosen.” The researchers noted...
In the new world of risk retention and commercial real estate securitization, direct issuance could be a potential financing alternative should third-party risk-retention capital become inadequate to meet demand, according to a CRE debt market expert. Direct issuance and other alternative types of transactions may become increasingly viable in addressing the difficulty of refreshing on an ongoing basis the amount of capital necessary to float the commercial MBS industry, said Rick Jones, a partner with Dechert and co-chair of the firm’s finance and real estate group. Jones cited...
This year, nonprime production across the U.S. might top $3 billion to $4 billion at best. At its peak last decade, it was a $1 trillion a year business. That’s not a misprint…
The private mortgage insurance industry is calling for a level playing field between the government-sponsored enterprises and FHA and VA as the Consumer Financial Protection Bureau begins its assessment of the ability-to-repay rule. In comments to the CFPB, U.S. Mortgage Insurers urged the bureau to determine whether potential arbitrage in QM standards for Fannie Mae and Freddie Mac and those for FHA and VA have had any negative effect on consumers ...
Watt, a former Congressman, wants Congress to reform the GSEs legislatively to solve their conservatorship status and find a path forward for the two enterprises.
Not only has the proposed sale of First Mortgage Co. fallen apart, but a recent lawsuit filed against the company by a new warehouse lending firm raises serious questions about FMC’s recent profitability and its future. As Inside Mortgage Finance went to press this week, FMC was no longer making new loans, but was still servicing its past production, estimated at $1.67 billion. Company owner and CEO Ron McCord – one of six defendants sued by warehouse provider CapLoc – said...
Non-qualified mortgages are starting to look attractive to some nonbanks with refinance activity declining and interest rates projected to increase. Officials at Nationstar Mortgage revealed late last week that they plan to launch a non-QM offering later this year or in early 2018. “You’re starting to see some activity there,” Jay Bray, Nationstar’s president, chairman and CEO, said during the nonbank’s recent earnings call. “And when we look at our portfolio, we may be in the best position in the industry, frankly, to offer some of those products.” Nationstar serviced...
PHH Corp., Ocwen Financial and Walter Investment Management Corp. have quite a bit in common these days: all are large publicly traded lender/servicers that continue to lose money while struggling to find a path to both regulatory redemption and a business model that works. But recent earnings reports and public filings suggest immediate relief looks elusive for all three. For now, Walter – the parent of Ditech Financial, the nation’s 10th largest servicer – appears...
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