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Inside Mortgage Trends

January 15, 2010

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GMAC Takes Another Stab at Restoring Its Ailing Mortgage Business to Profitability

GMAC started off the New Year with a fresh $3.8 billion infusion of additional capital from the U.S. Treasury, in part to help it deal with its troubled mortgage unit, ResCap. But doubts remain as to whether that will be enough to help the struggling subsidiary regain its footing on profitable ground – or make it more attractive to potential buyers. GMAC Financial Services... Read More

Risk Management Takes Top Priority

A recent survey of major mortgage-credit risk managers showed a significant shift in servicing and lending practices that signals a newfound emphasis on managing credit risk in different ways. Craig Focardi, senior research director of consumer lending at TowerGroup, said a recent survey of 21 risk managers revealed that companies are investing more in information technology, trying to... Read More

TDR Loans Could Remain in Pools

The Financial Accounting Standards Board is seeking comment on a proposed accounting rule change that would allow restructured loans to remain in loan pools. The FASB exposure draft addresses the increasing diversity in the treatment of modified loans in a loan pool, particularly with the growth of impaired-loan acquisitions and the number of contractual modifications for... Read More

Provident Securitizes to Bolster Funding Options

Being the largest privately-held, non-depository mortgage banker left in the industry, Provident Funding Associates faces some unique challenges in a market that has been especially tough on independents. But the Burlingame, CA-based lender recently put together a novel securitization structure that will broaden its funding options despite being an unrated company. PFA was able to do that in part... Read More

Right Pricing Service is Key to Sound Management

Finding an asset pricing service that can integrate sophisticated research with the right pricing models and use skilled judgment in choosing the appropriate assumptions is crucial to better understanding and managing asset portfolios, according to Clayton Independent Pricing Service. In today’s fair-value environment, a pricing service needs to have a basic and practical working... Read More

IBM Bets on Subprime Servicing as BofA Refocuses

In a strikingly opportunistic move, International Business Machines Corp. is poised to close a transaction this quarter in which it will acquire the subprime servicing business of Wilshire Credit Corp. from Bank of America for an undisclosed sum. For BofA, the deal comes as the big lender works to clear its decks and refocus strategically in the wake of its Merrill Lynch acquisition... Read More

Profitability Briefs

Working Equity, a financial services firm in San Francisco, recently introduced a national Equity Protection product that protects a homeowner’s equity from home price fluctuation... Mortgage Builder, a provider of loan origination software systems, recently released Version 3.9 of its LOS, along with user training and other enhancements that help lenders... Read More

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