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Inside Nonconforming Markets

April 14, 2006

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Subprime MBS Market Sees Slower Growth in the Early Part of 2006

A slowdown in volume appears to be catching up to the subprime MBS market. While volume rose during the first quarter of the year, it didn’t grow at the gangbuster pace of the previous two years. According to data compiled by the Inside Mortgage Finance MBS Database, subprime MBS issuance through the end of March rose at a solid 19.3 percent clip, to $123.28 billion, on a year-to-year basis. Significantly, at its current pace,… [One data table included] Read More

Servicers Feel the Heat as Loan Interest Rates Rise

The origination practices of subprime lenders appear to be putting some pressure on servicers, which find themselves challenged with managing potentially volatile portfolios as interest rates rise and home price growth stalls. Ominously, the changing economic environment could lead to a surge in delinquencies, defaults, and possibly lawsuits, warned participants at the Housing Finance Summit last week put on by the Opal Financial Group. … Read More

Option One Targets Emerging Markets with New Programs

Option One Mortgage is stepping up its efforts to capture new business in emerging markets with a new business unit that will focus exclusively on growing minority populations and niches across the country. “By creating a department focused only on this growing population, we hope to identify more ways to meet their mortgage lending needs.” said Larry Gilmore, vice president in charge of the newly-formed Emerging Markets department. … Read More

ECC Capital Execs Take Big Pay Cut to Help Cap Costs

Who says there’s no such thing as a free lunch? ECC Capital Corp. is about to get one – for the next year – courtesy of two senior executives who say they will work free as the beleaguered real estate investment trust tries to adjust to a fiercely competitive marketplace. … Read More

With Sale Looming, RFC Upgrades Nonprime Program

While most of the talk recently has focused on the future of its parent, GMAC, Residential Funding Corp. has quietly launched a series of upgrades to its AlterNet subprime mortgage program. “These significant improvements to our AlterNet program allow mortgage lenders and correspondents to offer more real estate financing choices for consumers,” said Anne Peacock, RFC’s managing director for product and business strategy management, in a statement that outlined a host of product enhancements… Read More

Tough Environment Leads to Wholesale Changes at Saxon

Saxon Mortgage is paring down its wholesale unit as part of a plan aimed at keeping the company competitive in a market where it’s become harder for lenders to make a profit. “The extremely competitive pricing and market conditions in 2005 brought new challenges for Saxon,” said company CEO Michael Sawyer. “However, within this environment, our management team remained focused on our core discipline of risk-based pricing, credit and strategic capital deployment.” … Read More

HMDA Data Shows Larger Disparities Among Races

The subprime market is bracing for another round of controversy as preliminary Home Mortgage Disclosure Act data show that minority borrowers got more high-priced loans last year than they did in 2004 – and that the gap between those borrowers and their white counterparts widened. The first warning about the HMDA data was sounded by the Federal Reserve Board. In a recent update to its Q&A on HMDA, the agency said that a preliminary… Read More

Teen Financial Literacy Still Not That Great, Poll Finds

The next generation of mortgage borrowers isn’t all that familiar with how the financial markets work – though they do seem to have a pretty good grasp of housing finance. That was one of the major conclusions to emerge from a nationwide survey of high school seniors conducted earlier this year by the nonprofit Jump$tart Coalition for Personal Financial Literacy. The fifth in a series, the survey aimed to gauge the basic financial knowledge… Read More

Revamped FHA Takes Aim at Would-Be Subprime Clients

Can the Federal Housing Administration provide mortgage borrowers with a viable alternative to high-priced subprime mortgage financing? Officials seem to think so. In testimony last week at a Congressional hearing on proposed changes to the FHA’s flagship single-family mortgage program, HUD repeatedly expressed its view that a revamped government-insured product will be able to save borrowers money and keep them away from unscrupulous lenders and risky mortgage products. … Read More

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