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Inside Nonconforming Markets

November 18, 2005

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Subprime Lenders Help Power the Mortgage Market in Busy 3Q ‘05

Times may be getting tougher in the subprime market, where lenders are reporting that competition has made it harder to make money. But the volume numbers suggest that lenders have been working overtime to push new loans out the door in the third quarter. Inside B&C Lending estimates that $475.06 billion in new subprime loans were originated during the first nine months of the year, a 22.8 percent increase over... Read More

Interest Rates are Key to New Broker Business, Poll Finds

Is your wholesale shop planning to beef up its broker network with a high-profile branding or advertising campaign? You may want to reconsider.In fact, a new survey sponsored by Inside Mortgage Finance Publications suggests that the average broker prefers substance over glitz and that lenders that offer a range of loan programs at competitive prices are likely to have a leg up in the competition for new business. The... Read More

Cost Focus Helps Accredited Gain in Difficult Market

Red-hot competition for new business has forced subprime lenders to make some difficult choices in recent months. Consider the case of Accredited Home Lenders. The San Diego-based lender has made a name for itself in the subprime sector as a company that focuses heavily on profitability in the origination process. The profit emphasis is engrained in the company’s compensation policies as well, with loan officer commissions tied to the secondary-market... Read More

Credit Topped Reasons for Denial in 2004, HMDA Shows

Credit-related issues were the number one reason that would-be mortgage borrowers had their applications for credit turned down last year, a review of data filed under the Home Mortgage Disclosure Act reveals. Nationally, 13.6 percent of mortgage applicants were denied last year, a figure that was virtually unchanged from 2003. Denial rates were slightly higher on conventional refinance loans, than on purchase money loans, 14.7 percent compared to 12.3 percent... Read More

WaMu Aims For a Bigger Subprime Market Footprint

With its eye on a bigger slice of the mortgage market pie, Washington Mutual has plans to dramatically expand its subprime mortgage activities in the months ahead. During its annual investor conference in New York last week, the thrift outlined a strategy for its subsidiary Long Beach Financial that includes hiring more salespeople and entering new territories. The subprime lender saw its volume grow 111 percent year-to-date as of Sep. 30... Read More

OCC Flexes Oversight Muscle In Settlement With HLC

The Office of the Comptroller of the Currency has flexed its muscle – and sent a message – with a settlement with a Georgia-based subprime lender that the regulator claims cheated borrowers out of money when it reneged on loan pre-approvals. The settlement, in which Homeowner’s Loan Corp., a subsidiary of Laredo National Bank, agreed to pay up to $14 million in borrower redress and make changes to its business practices while... Read More

More Banks Holding on to Subprime Loans, CBA Finds

Banks appear more willing this year to hold their subprime production in their portfolios than they have in the past. That was one of the key findings to emerge from the 2005 Home Equity Study, sponsored by the Consumer Bankers Association. The results of the poll, released last week, suggest that banks both large and small have stepped up their subprime lending activities during the past year, while making a... Read More

HMDA Cases are Coming, But Winnable, Attorneys Say

The plaintiff’s bar hasn't gotten around to suing lenders yet for discrepancies evident in their Home Mortgage Disclosure Act data. But don’t fool yourself – litigation is on its way, experts say. “It will happen,” warned Andrew Sandler, a partner with the Washington, DC-based law firm Skadden, Arps, Slate, Meagher & Flom at a recent fair lending conference hosted by the Consumer Banker’s Association. Possible litigation has been a major concern... Read More

B&C News Briefs

Illinois’ bank regulator has laid the foundation for a controversial predatory lending program that will require borrowers in some Cook County neighborhoods to receive counseling prior to closing and create a database that could be used to track abusive lending practices. Industry groups are gearing up to try to squelch the four-year pilot program, approved in May by the legislature, which they say will add to the time and cost... Read More

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