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Inside Mortgage Trends

July 18, 2008

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Mortgage Industry Endures Massive Selloff, Struggles to Move Forward

Investors stormed the Bastille early this week, sending stock prices of companies tied to the mortgage industry mercilessly to the guillotine. Prices rallied in recent days, but it is far from clear that the industry has any positive heading at all. A basket comprised of stocks for 18 key financial services companies that depend, to varying degrees, on... [Includes one chart and one graph] Read More

FASB Encouraged to Be Deliberate In Changing MBS Accounting Rule

Wall Street is urging accounting policymakers to go slowly on a new rule on mortgage securitization that is already causing considerable anxiety in an already jittery financial sector even before it’s been released for public comment. Under pressure from the Securities and Exchange Commission, the Financial Accounting Standards Board has been drafting a major revision of Financial Accounting Standard... Read More

Is There Life Still in the ‘Hybrid’ Thrift Mortgage Lending Model?

IndyMac Bank tried as hard as it could to distance itself from the Alt A market that had fueled the company’s rapid growth over the past few years. But what the company couldn’t run away from was the pitfalls in its hybrid thrift mortgage strategy. Originally created by Countrywide Home Loans as a conduit for nonconforming mortgages, IndyMac first tried to make it as a real estate investment... Read More

Experts Debate Whether Fair Value Accounting Has Been Boon or Bane

Fair value accounting is forcing many mortgage lenders to take big, unnecessary writedowns for seemingly liquid securities which have lost value and become unmarketable as a result of the subprime market crisis and falling property values. This accounting system is, once again, under intense scrutiny at a time when subprime-related losses continue to fluctuate wildly long after the market... Read More

FDIC Makes Minor Changes in Covered Bond Policy That Could Boost Liquidity

Banks and thrifts sitting on piles of unsecuritized home mortgages could be encouraged to test a liquidity mechanism that this week won a qualified endorsement from the Federal Deposit Insurance Corp. European and other foreign banks have issued some $2.75 trillion of covered bonds, a way to tap capital markets without removing assets from the balance sheet. But only two US institutions have issued... Read More

Industry Leaders Offer Advice On How to Weather the Storm

Introducing more customer-oriented lending programs may be the key to surviving the floundering mortgage market, according to a recent panel discussion hosted by the Federal Deposit Insurance Corp. “If this current turmoil has taught the industry anything, it is the value of knowing your customer,” said Michael Shepherd, president and chief executive officer of Bank... [Includes one chart} Read More

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