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Inside Nonconforming Markets

July 21, 2006

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Subprime MBS Markets Shows Modest Growth at Midway Mark

A sluggish year for loan producers and the need to comply with new disclosure requirements have combined to slow down the subprime MBS market during the first half of the year. According to data compiled by the Inside Mortgage Finance MBS Database, $259.16 billion in new bonds backed by subprime mortgages were issued during the first half of 2006, a 7.8 percent increase from the same period in 2005. … [One data table included] Read More

Private Firms Got the Profit Blues in 2005, IBCL Finds

Privately-held subprime companies felt the same pain as their public counterparts when it came to profits in 2005, a new Inside B&C Lending analysis reveals. The analysis, which looked at year-end financial statements filed with state regulators, found that sagging gain-on-sale margins and rising expenses wreaked havoc on the net income of three major privately-held lenders, Ameriquest Capital Holdings., People’s Choice Home Loans and Ownit Mortgage Solutions … Read More

WaMu Frees Up Resources For ‘High-Margin’ Push

One of the subprime market’s largest players, Washington Mutual, says it is ready to make a push for more business, now that it is planning to unload its sizable portfolio of government-insured and fixed-rate conventional mortgages. “This enhances our ability to focus on higher margin products such as option ARMs, home-equity, Alt A and subprime loans,” said Kerry Killinger, WaMu chairman and CEO, explaining the company’s decision to sell $140.00 billion in mortgage servicing… Read More

ARMs Power the Subprime MBS Market in Early 2006

Rising interest rates apparently haven’t done much to dampen the appetite of subprime borrowers for adjustable-rate products. In fact, a new analysis of the subprime MBS market reveals that the share of ARMs in securitized pools has notched upward this year. According to the Inside Mortgage Finance MBS Database, ARMs accounted for 80.7 percent of the $259.16 billion in subprime loans securitized through the end of June. In 2005, ARMs accounted for 79.1 percent… [One data table included] Read More

Consolidation Reshapes the Subprime Mortgage Market

Consolidation is becoming the story of the year for the subprime market, with several major servicing and origination platforms changing hands. Recent months have seen such established names as Aames Investment Corp., Select Portfolio Servicing and HomEq Servicing change hands as competition has put pressure on profits. … Read More

NovaStar Wholesale Shop Eliminates the Middleman

A Michigan-based startup believes that it has hit on the formula for success in the nonprime market: running a lean shop that builds broker relationships without a cadre of account executives. “When you look at the current market, margins are compressed so much that we felt that we had to go out there with a low-cost model,” said John Pantalone, executive vice president of Acceleron Lending. … Read More

Rhode Island Becomes Latest State With Anti-Abuse Law

Add Rhode Island to the list of states that have enacted legislation aimed at cracking down on predatory lending. With little fanfare, Republican Gov. Donald Carcieri last week signed S. 2851, a bill that places new limits on a range of mortgage products while saving most of its fire for high-cost products. … Read More

Believe it or Not, RESPA is Still on the Radar Screen

Stop us if you’ve heard this one before, but the Department of Housing and Urban Development says that by year-end it intends to unveil a new disclosure scheme for residential mortgages as part of an overhaul of its Real Estate Settlement Procedures Act regulations. HUD has banged this drum before: in 2002, the industry headlines were dominated by HUD’s effort to craft a disclosure scheme that would combine a new good faith estimate with… Read More

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