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Inside Mortgage Finance

June 27, 2008

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Portfolio Lending Regained Some Ground in 2008, But Securitization Still Funds the Market

Despite the complete collapse of the non-agency mortgage securities market, the overwhelming majority of new home loans are still being financed through the MBS market, according to a new analysis by Inside Mortgage Finance. In the first quarter of 2008, 72.0 percent of new mortgage originations were pooled in new mortgage securities, off just slightly from a 73.8 percent... [Includes one chart] Read More

Misfortunes Doomed Triad-Investor Negotiations; MI to Lay Off 100 Workers in Business Run-Off

A combination of factors, including Freddie Mac’s suspension of Triad Guaranty’s status as an approved mortgage insurer, led to the collapse of talks between the beleaguered MI company and investors to form a new monoline MI company. On June 19 Triad, the smallest of four MI providers registered with the Securities and Exchange Commission, announced termination of... Read More

Home-Equity Lending Tapering Off in Early 2008 As Outlook Remains Unclear and Losses Mount

Mortgage lenders continued to ratchet down their home-equity lending activity as property values eroded further and losses on home-equity loans weighed on bank earnings. Originations of home-equity loans – including home-equity lines of credit and closed-end second mortgages – fell to an estimated $45 billion in the first quarter of 2008. That was down 22 percent from... [Includes one chart] Read More

FBI Mortgage Fraud Sweep Arrests 400, But Scarce Resources Hamper Agency’s Efforts

The Federal Bureau of Investigation late last week announced the arrest of over 400 individuals in a nationwide sweep aimed at mortgage fraud. But some observers question whether the government’s efforts are putting much of a dent in a massive problem that’s becoming more visible in the slumping housing market. The dragnet, coined “Operation Malicious Mortgage,” focused on... Read More

Investors Demand More Information from Lenders as Prerequisite to Tapping MBS

The non-agency mortgage-backed security market is frozen and investors suggest it will not thaw until they can extract concessions from lenders. At the Securities Industry and Financial Markets Association’s MBS due diligence conference this week in New York, investors did not shy away from suggesting that they will bully lenders looking to securitize mortgages. “Investors have... Read More

Senate Considers Overruling GSE Appraisal Agreement

The Senate this week considered legislation that would effectively override the controversial agreement on appraisal practices forged by Fannie Mae, Freddie Mac and the NY Attorney General. Sen. Elizabeth Dole, R-NC, offered an amendment to omnibus housing legislation debated on the Senate floor this week that would direct the Office of Federal Housing Enterprise Oversight to issue... Read More

GSE Appraisal Agreement May Face Legal Challenge, But Tighter Rules Seem Inevitable

The debate over the controversial new appraisal guidelines established by the New York Attorney General, the Office of Federal Housing Enterprise Oversight, Fannie Mae, and Freddie Mac is increasingly likely to spill into court, industry insiders say. “If this agreement is allowed to continue, there will be litigation over it,” said Ray Natter, a partner at Barnett Sivon and... Read More

Think Tank Says Housing Legislation is Just First Step, More Needed, Including New Rules for Home Mortgages

Policymakers not only need to enact the housing rescue legislative package pending in Congress, they also need to adopt rules to usher in “a new era in home equity loans,” according to a report issued mid-week by the public policy center Demos. “The mortgage industry cries out for new rules, both to protect homeowners and honest lenders in the here and now, and to guard against the next... Read More

Senate Passage of Omnibus Housing Bill Seems Likely Although Parliamentary Maneuver Stalls Movement

The Senate inched closer to wrapping up an historic housing bill that would expand the federal government’s role in the mortgage market. But an eleventh hour parliamentary maneuver stalled final passage of the Foreclosure Prevention Act of 2008 as we went to press on Thursday. The results of a compromise negotiated by Sens. Chris Dodd, D-CT, and Richard Shelby, R-AL, the ambitious... Read More

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