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Inside Nonconforming Markets

May 26, 2006

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Goliath Servicers Maintain Their Hold on the Subprime Loan Market

When it comes to the business of servicing subprime mortgages, it’s apparently better to be bigger. That was evident in the early part of this year, when a handful of giant servicing shops held a large portion of the outstanding loans in their collective portfolio. Overall, Inside B&C Lending estimates that the subprime market grew by 3.3 percent, to $1.24 trillion in outstanding loans, between the end of December and the end of March. That… [One data table included] Read More

Changing Market Leads to Reinvention at Option One

A long-time subprime mortgage player, Option One, believes that business as usual won’t work in the new subprime market. So, the H&R Block subsidiary is making major changes to its process and operations, with an eye toward paring costs and creating more efficiency. “We are convinced that the operating models that we have used successfully for 10 years are not going to work in the future,” said Steve Nadon, president of H&R Block’s Consumer… Read More

Does Ameriquest Have the Right Formula for Success?

Changes to the way that business is being done at Ameriquest Mortgage have dominated the industry headlines recently, with much of the talk focusing on whether the retail giant’s vision of the marketplace is correct. But officials at the California-based lender say that the decision to close nearly 300 branches and fire close to 4,000 workers as part of a strategic reshuffling will position it well for long-term growth. … Read More

Ohio Bill Raises the Stakes of State Predatory Lending Laws

Lawmakers in Ohio have raised the bar for state predatory lending statutes with a bill that would impose significant new responsibilities on loan officers and mortgage brokers. As Inside B&C Lending went to press, Ohio’s Republican Governor, Bob Taft, appeared set to sign SB 185, a bill that amends the state’s Consumer Sales Practices Act, broadening its licensing standards, placing new limits on some loan terms, and re-defining the relationship between originators and borrowers. … Read More

Hope for Anti-Abuse Bill Dwindles as End Draws Near

Put aside any hope that a national standard on predatory lending will be enacted this year: industry attorneys and lobbyists are conceding that it’s not going to happen. But the table could be set for action next year, thanks to a strategy that the industry hopes will get predatory lending on a “short-list” of issues to be addressed by lawmakers in 2007. Whether that bill will be palatable to lenders is another matter. … Read More

Accredited Home Lenders Gobbles up Aames Platform

Holding true to its prediction earlier this month that it had a buyer, Aames Investment says that it will merge with Accredited Home Lenders. The San Diego lender will spend $340 million for Aames in cash and stock. Officials say the proposed merger pairs mid-sized lenders with similar operating strategies and sales cultures. In particular, Accredited sees the deal as a way to extend its reach in the retail market, adding 76 Aames branches, while… Read More

Fed Will Filter HMDA Data To Weed Out Rate Changes

In a move that it says will provide a clearer picture of high-cost lending patterns, the Federal Reserve Board plans to filter data submitted by lenders under the Home Mortgage Disclosure Act to weed out the impact of interest rate changes. At the recent Nonprime and Alternative Mortgages Conference in Washington, DC, Glenn Canner, a senior adviser to the Federal Reserve Board, said that the agency’s preliminary review of HMDA data suggests that more borrowers… Read More

B&C News Briefs

â A new cooperative promises to help small, independent subprime lenders maximize their revenues, lower their expenses and boost their market shares. The cooperative, known as Patriot Lenders, was launched last week in St. Louis by Lenders One Mortgage Cooperative, which bills itself as the largest alliance of prime mortgage originators in the country. Officials said the new nonprime co-op will help lenders “operate more efficiently and profitably by leveraging the power of the… Read More

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