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Inside Nonconforming Markets

August 25, 2006

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Alt A Production Hits a Small Bump in 2Q 2006

A red-hot Alt A market lost a bit of its steam in the second quarter, as several large lenders trimmed their production. Still, the market closed the end of June running well ahead of last year’s record pace. According to data compiled by Inside Alternative Mortgages, $209 billion in new Alt A mortgages were originated during the first half of 2006. On a quarterly basis, volume was down by 1 percent... Read More

Lenders Urge Caution on Suitability Standards

Regulators should tread lightly when considering new disclosures or onerous suitability requirements for companies that originate nontraditional mortgages, industry groups have cautioned. The warnings came in response to a series of recently concluded hearings that were convened by the Federal Reserve Board to examine consumer protections and borrower behavior in the home-equity loan market. The Fed is charged with rulemaking authority for the federal Home Ownership and Equity Protection Act... Read More

Changes May Be Afoot for Reverse Loan Market

Are fees on reverse mortgages too high? Do borrowers in one of the market’s fastest-growing segments actually understand how much they are paying and how their loans work? Those were the questions on the minds of Federal Reserve Board officials during a panel discussion about reverse mortgage products at the agency’s recent hearings on the home-equity loan market. Designed to provide a source of income to older homeowners who have accumulated a large... Read More

Rebates Help BrooksAmerica Grab Option ARMs

A California-based mortgage bank is offering rebates to mortgage brokers who successfully convince borrowers to take its option ARM products. But officials at BrooksAmerica mortgage say that the rebates are just one prong of a strategy that aims to court new business through superior service that features a “human touch.” Terry Cabaniss, head of operations for the Irvine-based lender, said that the decision to offer a 3.5 percent rebate reflects the... Read More

New Citi MBS Deal Features Simple Interest Loans

Citigroup Trust Bank has completed a secutization deal comprised mostly by nonprime mortgages with biweekly pay schedules offered as a part of a program that the bank believes will allow its customers to build equity more quickly. But the $768.33 million deal, backed by fixed-rate, first-lien refinance mortgages, is likely to raise some eyebrows for its unique loans structures: the underlying mortgages were underwritten using a simple interest approach... Read More

Past-Due Trends Key to Option ARMs, DBRS Says

Investors in securities backed by option adjustable-rate mortgages should use a “telescope” approach to surveillance. That was the advice provided by analysts at Dominion Bond Rating Service in a new update on developments in the option ARM market. The rating agency cautioned that keeping tabs on option ARM performance can prove tricky because of heightened credit risks that could lead to rapid deterioration, particularly at a time of slowing home price appreciation... Read More

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