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Inside Nonconforming Markets

August 11, 2006

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Crystal Ball Points to Continued NonTrad Growth

What does the future hold for the alternative mortgage market? Experts say that the signs point to growth as borrowers look for ways to maximize their purchasing power. “Which factors will drive product development over the next five to 10 years? Borrowers are asking for products that enable them to extend their purchasing power in order to purchase homes in high-cost markets, products that either lower downpayments and/or lower monthly payments...” Read More

New Disclosures Needed for NonTrads, Fed Hears

Is a new disclosure scheme the answer for the problems confronting borrowers in the nontraditional mortgage market? Some industry participants think so. The question of borrower knowledge – how and when loan information is provided to consumers – was a key topic of discussion at a series of recent hearings hosted by the Federal Reserve Board. While the hearings focused on issues surrounding the federal Home Ownership and Equity Protection Act, nontraditional mortgages... Read More

Irwin Sheds Mortgage Unit, Focuses on HELs

Irwin Financial Corp. has sold its conventional mortgage business in a move that the company says will allow it to focus on nonconforming loans and home-equity products. In a statement last week, Irwin said that it has reached an agreement to sell Irwin Mortgage to Freedom Mortgage, a New Jersey-based lender that features a number of prime and subprime products, including interest-only loans and reduced-documentation mortgages... Read More

Wells Fargo Leads IO Loan Pack at Midway Mark

Rising interest rates, regulatory uncertainty and strategic shifts by mortgage lenders appear to have taken a toll on the market for interest-only loans, where volume was down in the first half of 2006.Inside Alternative Mortgages estimates that $270 billion in new IO loans were originated through the end of June. That marked a 17.4 percent drop from the estimated $317 billion in new IO loans that were originated during the same period...[One data table included] Read More

New Option ARM Enters Securitization Market

A new breed of hybrid option ARMs with fixed interest rates has made it into the securitzation market – a sign that it is likely here to stay. “The performance of these mortgage loans may be significantly different than mortgage loans that fully amortize or have other negative amortization features that are more common to the marketplace,” said Bear Stearns in the offering prospectus for its $981.6 million Mortgage Funding Trust 2006-AR1 transaction... Read More

Subprime Lenders Target Alt A Borrowers

Subprime lenders appear to be gearing up for an assault on the Alt A business, as profit pressures continue to dog the sector. “We’re going to compete with the Alt A lenders,” said Joseph Lydon, chief operating officer of Accredited Home Lenders, outlining the company’s strategy in a recent conference call with analysts. “We want to be a player in the higher quality business and continue to be a player in that market going forward... Read More

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