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Inside Nonconforming Markets

August 18, 2006

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Product Changes Help Subprime Market Post Solid Growth in 2006

The subprime mortgage market closed the second quarter of 2006 in a state of flux: while volume was up a bit over last year’s record level, lenders have had to make changes to their product mixes in response to shifting secondary market conditions and borrower preferences. According to data compiled by Inside B&C Lending, lenders turned out $333 billion in new subprime mort-gages during the first half of the year...[Two data tables included] Read More

No Contract? Not a Problem, Ameriquest Monitor Says

The man charged with ensuring that Ameriquest Capital Corp. abides by the terms of a $325 million settlement agreement with state attorneys general has yet to sign a contract to do the job. Nonetheless, he says the work of monitoring the business of one of the subprime industry’s largest retail shops is gearing up. “We have an agreement in principle, although we don’t have a final written document back from Ameriquest yet...” Read More

Industry Groups Urge Fed to Be Careful With Disclosures

Industry groups are urging the Federal Reserve Board to tread lightly in its review of the federal Home Ownership and Equity Protection Act. Enacted a decade ago, HOEPA requires extra disclosures on lenders that originate high cost loans, those on which the borrower pays more than 8 per-cent of the loan amount in fees. It also covers first mortgages with annual percentage rates that exceed the rate on comparable... Read More

New Proposal Offered in Quest for Anti-Abuse Bill

The industry’s quest for a national predatory lending bill that would scuttle state and local laws isn’t going to end happily this year, as Congress appears unlikely to address any of the myriad of pending bills before it recesses for good in October. But that hasn’t discouraged lawmakers from working behind the scenes to secure a consensus that could set the table for action next year. That effort was highlighted... Read More

Accredited Revamps Strategy To Retain Loan Sales Force

Fierce competition for new mortgages has led to some strategic tweaks at Accredited Home Lenders. Officials at the San Diego-based finance company outlined the strategic changes during a recent conference call with analysts, who questioned how the company plans to respond to a shifting marketplace. The challenge facing Accredited – and many of its competitors – is that many of its bread-and-butter products have been eliminated recently because soft secondary market demand... Read More

ECC Becomes Latest B&C Lender On the Sales Block

A California-based real estate investment trust, ECC Capital Corp., may be hanging up the “for sale” sign as it struggles to overcome losses fueled by a mounting number of repurchase requests. In its second-quarter earnings statement, ECC reported that it has formed a special committee, made up of its four independent directors, charged with re-viewing “potential strategic alternatives “to enhance shareholder value.” The committee is working with consulting firm Friedman... Read More

ARMs Pose ‘Threat’ to Some Cities, ACORN Study Warns

Minority neighborhoods in large metropolitan areas could bear the brunt of problems created by payment shock on adjustable-rate loans. That was one of the major conclusions of a study released last week by the Association of Com-munity Organizations for Reform Now, or ACORN, which used data submitted by 15 large lenders under the Home Mortgage Disclosure Act in 2005 to exam-ine the impact of ARM rate resets. ACORN estimates that the sample... Read More

Morgan Stanley Steps Up Presence with Saxon Buy

Aiming to flex a bigger muscle in the loan origination game, Morgan Stanley has reached an agreement to purchase Virginia-based Saxon Mortgage. “The transaction supports Morgan Stanley’s strategy of building a global, vertically integrated residential mortgage business,” the investment bank said in a statement announcing the $706 million deal. “Saxon adds a premier servicing operation with a scalable U.S. origination platform to [our] existing residential mortgage franchise.” Morgan’s acquisition is... Read More

B&C News Briefs

Subprime lenders joined with community groups this week to conduct an outreach session for victims of Hurricane Katrina. The event, coordinated by Op-tion One, was also attended by representatives from Chase Mortgage, Countrywide Home Loans, and Homecomings Financial. Representatives of the Association of Community Organizations for Re-form Now, the National Community Reinvestment Coalition and two New Orleans-based counseling agencies were also present. The event allowed homeowners to trade stories about... Read More

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