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Inside Nonconforming Markets

June 16, 2006

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Innovation Continues to Shape Alt Loan Market

Innovation is the name of the game in the alternative mortgage market, and players large and small are playing hard – introducing new twists on affordability products that they claim will help keep payments low while providing more certainty and stability for borrowers. Of course, option ARMs, interest-only loans, and extended amortization programs are still relatively new products. But new wrinkles on the products have already emerged as lenders look for ways to smooth… Read More

Countrywide Leads Alt A Market in Early ‘06

The Alt A mortgage market cooled a bit in the early part of 2006, with quarterly volume dropping from the record levels reached at the end of 2005, a new Inside Alternative Mortgages analysis and ranking reveals. Overall, $95 billion in new Alt A loans – or loans to borrowers with good credit profiles who don’t qualify for, or don’t want, conventional mortgages because of documentation or other issues – were originated during the… [One data table included] Read More

Talk of Suitability Standard Heats Up at Hearing

Is a suitability standard for loan originators needed in order to ensure that borrowers aren’t victimized when they receive alternative mortgage products? Some advocacy groups think so, and they are pressing their case aggressively with federal policymakers. The idea of suitability isn’t new. Financial advisors such as stockbrokers already operate under such a system, which requires that they work in the best interest of clients and legally binds them to find and recommend only products… Read More

Sage Credit Sees Wisdom in Retail Approach

A California-based non-prime lender is banking on collected wisdom to help grow its business while creating a “Mercedes” brand image in the months ahead. To say that Sage Credit Corp. is a new company is a bit of a misstatement. The Irvine-headquartered company was incorporated in 2003. But founder and President Quentin Caruana took a bit of a different approach to building a lending operation. Instead of setting up shop and making loans regionally,… Read More

Piggybacks Riskier Than Thought, S&P Warns

Throw out all your assumptions about the risk profile of piggyback second mortgages. A new analysis by rating agency Standard & Poor’s suggests that the combination loans are much more likely to default than was previously believed, opening investors up to the possibility of losses and potentially making it harder for originators to sell their loans at a profit on the secondary market. … Read More

State Bank Regulators Work on Nontrad Guidance

Proposed federal guidance on non-traditional mortgage loans, when finalized, could give a competitive advantage to state-chartered banks and finance companies, which would presumably be able to operate with looser standards that impose lower costs and increase their marketing muscle. But that competitive advantage may vanish before it even exists, if state regulators have their way. … Read More

Niche Programs Important to Brokers, Poll Finds

When it comes to working with mortgage brokers, wholesale lenders shouldn’t discount the importance of a broad product line. That was one of the key findings to emerge from a recent study of brokers sponsored by Inside Mortgage Finance Publications and conducted by Campbell Communications. The study, entitled “How Mortgage Brokers Work with Prime Conforming Lenders,” is based on survey responses from more than 2,4000 brokers nationwide who were asked to weigh in on… Read More

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