Student loan debt is no joke in America – and mortgage bankers, in particular, know all about it, especially since it’s being singled out as the chief reason why some borrowers can’t afford to buy their first home. Each year, a new group of college graduates has to start figuring out how to pay off their student loans. There’s even a website dedicated to showing the national student debt in real time – roughly $1.2 trillion as Inside Mortgage Trends went to press – along with credit card debt and auto loans. Currently, 15 percent of mortgagors have...
Emerging eClosing technology may make borrowers a little smarter, according to the Consumer Financial Protection Bureau, but it isn’t easy for lenders to implement. A CFPB report on the agency’s eClosing project found that borrowers who participated in the pilot scored slightly higher in a quiz on the closing process than did those who relied on good-old paper. The eClosers were...
Appraisal independence requirements adopted by the government-sponsored enterprises helped reduce the probability of inflated appraisals and made it more difficult to obtain mortgages, according to new research by staff at the Federal Reserve Bank of Philadelphia. Lei Ding, a community development economic advisor at the Philadelphia Fed, and Leonard Nakamura, a vice president and economist, detailed their findings in a paper published at the end of July. The government-sponsored enterprises adopted...
Moody’s Investors Service late last week proposed changes to how it rates commercial MBS. The rating service, which has been lagging in rating the type of deals subject to the revision, said the changes will result in upgrades and more positive treatment of loans with high loan-to-value ratios. Moody’s proposed to recalibrate its benchmark LTV ratios and “refine” how adjustments are made to benchmark LTV ratios. The proposal would allow for lower subordination requirements. The changes would apply to ratings of multi-borrower large loan commercial MBS and single asset/single borrower commercial MBS. “The main objective of the proposed changes for North American securitizations is...
The application of capital requirements to MBS and other structured finance products in the coming years will likely trump any typical collateral analysis investors currently consider, according to analysts at Standard & Poor’s. In a report published late last week, the analysts said global capital requirements have the potential to become impediments to providing financing via securitized products. “Of particular investor focus recently are...
Standard & Poor’s ranked as the most active rating service in the non-mortgage ABS market at the midway mark in 2015, but came in last in the non-agency MBS sector. S&P provided ratings on $63.55 billion of non-mortgage ABS issued during the first half of the year, or 60.3 percent of total issuance. That was off slightly from its 64.1 percent market share for all of last year. The company has gotten more active in rating credit card deals, but has lost some of its share in vehicle finance and business loan ABS. Fitch was...[Includes two data tables]
A federal appeals court in New Orleans has overturned a 2014 district court ruling, reviving two government MBS lawsuits that were initially dismissed because they were filed past the state’s established time limit. The Federal Deposit Insurance Corp.’s separate lawsuits against RBS Securities Inc., on one hand, and against Deutsche Bank and Goldman Sachs, were both filed on Aug. 17, 2012. The complaints alleged that the banks misled investors about the credit quality of the mortgage loans that backed $840 million in non-agency MBS. The district court’s decision to dismiss, however, turned on...
The average daily trading volume in agency MBS increased to $189.0 billion in July, a rare occurrence for an asset that’s been under selling pressure this year. According to figures compiled by the Securities Industry and Financial Markets Association, trading volume peaked in January at $245.9 billion and hasn’t looked that good since. In June, trading volume was an anemic $183.7 billion, the lowest reading of the year. Investors continue...
M&T Bank is attempting to reach a settlement with the Department of Justice to resolve an investigation into the bank’s origination of FHA loans and sales of conventional-conforming mortgages to Fannie Mae and Freddie Mac. The bank disclosed the investigation in its quarterly filings with the Securities and Exchange Commission, noting similar ongoing investigations at other financial institutions. A bank spokesman declined to comment beyond what was disclosed in the SEC filing but noted that the government agencies are conducting one investigation. On the FHA side, DOJ and the Department of Housing and Urban Development’s Office of the Inspector General are investigating...
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