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Inside Nonconforming Markets

June 30, 2006

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Nonprime Lenders Target Alt A Space For Growth

Traditional subprime lenders are finding opportunities up the credit scale with new programs aimed at Alt A borrowers. The focus on better credit business isn’t new. Subprime lenders long ago began to address loan pricing and performance issues by focusing most of their efforts on “just miss” borrowers, usually labeled A-, who have debt ratios, credit profiles, or other characteristics that are just outside of what is needed to qualify for a conventional mortgage. … Read More

Brokers, Lead Firms, Scoop Up Alt Loan Domains

Those seeking evidence that alternative loan products have gained a foothold in the mortgage market need look no further than the Internet, where a plethora of new Web sites aimed at nontraditional loan products has sprung up. A search of the Web by Inside Alternative Mortgages revealed that dozens of domain names related to alternative mortgages have been registered – and many are being actively used by lenders, brokers, and lead generators to gather… Read More

Banks and Thrifts Build HEL Portfolios in 2006

The prime home-equity origination market posted solid growth in the early part of 2006 – thanks largely to surging demand among banks and thrifts for second mortgages. Inside Alternative Mortgages estimates that $100 million in new prime home-equity loans – including home-equity lines of credit and closed-end second mortgages – were originated during the first quarter of this year. That marks an 8.6 percent increase from same period in 2005. But on a quarterly basis,… [One data table included] Read More

Long Amortization May Be Less Risky, Fitch Finds

Lenders that continue to push the envelope on amortization recently got some good news this week: a report from Fitch Ratings suggests that the longer-term loans may not be as risky as bread-and-butter 30-year mortgages. In its June 19 report, Fitch highlighted three main risks associated with longer amortization loans: larger payment increases for ARMs, adverse selection as lower payments increase buying power, and slow equity accumulation. … Read More

REITs Adjusting to Changing Alt A Market

Real estate investment trusts are making adjustments to their business strategies in response to changes in the landscape of the Alt A market. That was evident from presentations at a recent investor conference sponsored by the National Association of Real Estate Investment Trusts. Structured to gain tax benefits, REITs are required to pay out the majority of their earnings to shareholders in the form of dividends. Many mortgage companies have adapted the idea, combining… Read More

IMF Sues Credit Suisse for Copyright Infringement

Inside Mortgage Finance Publications, the publisher of Inside Alternative Mortgages, this week announced it has filed a lawsuit against Credit Suisse in New York, accusing the Wall Street firm of copyright infringement. The suit, filed in U.S. District Court in Maryland, alleges that Credit Suisse systematically infringed IMF Publications’ registered copyrights by making unauthorized copies of the weekly newsletters Inside Mortgage Finance and Inside MBS & ABS, as well as the biweekly newsletters Inside B&C… Read More

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As homeowner equity continues to build, more and more lenders are launching home equity lending products. Are you thinking of joining this market?

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