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Inside Nonconforming Markets

January 19, 2007

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IndyMac, WaMu Stumble, Other Alt Players Next?

IndyMac Bancorp and Washington Mutual this week warned that their companies are faltering, and that quarterly earnings will be well below projections. Rising delinquencies and the sluggish housing market are expected to wreak havoc on a number of other top lenders, including Countrywide... Read More

IOs Play Significant Role in GSE Business

Fannie Mae and Freddie Mac continued to see strong lender demand for their programs that swap interest-only mortgages for mortgage-backed securities during the latter stages of 2006, despite increasing regulatory scrutiny of these loans... Read More

Regulators Considering Hybrid ARM Crack-Down

Federal regulators are weighing expanding the guidance on nontraditional mortgages to include hybrid adjustable-rate mortgages. Another route could be to update existing guidance on subprime lending... Read More

Neg Am Data Collection Raises Industry Hackles

Banks and lenders are opposing a federal initiative to collect data on mortgages with negative amortization features, which they said goes beyond the federal interagency guidance on nontraditional mortgages... Read More

Lender Faces Option ARM Class-Action Suit

Several thousand borrowers who received option ARMs from Chevy Chase Bank may be able to rescind their loans under a summary judgment issued this week by a federal district court judge. In a lawsuit seeking class-action status filed in U.S. District Court in... Read More

Moody’s: 40-Year Loans Less Risky Than IOs

Borrowers are using the extended terms of 40-year loans to qualify for bigger mortgages rather than reduce their monthly payments, Moody’s reports. While this use might go against the initial intent of the mortgages... Read More

HUD Proposes HECM Counselor Changes

The Department of Housing and Urban Development is considering revising FHA’s Home Equity Conversion Mortgage program to include testing standards for counselors and a roster of eligible advisors... Read More

Countrywide Leads Option ARM Lenders in 3Q06

The share of option adjustable-rate mortgages in the market grew in the third quarter of 2006, despite performance and regulatory concerns. Inside Alternative Mortgages estimates that $208 billion in option ARMs... Read More

Hybrids Gain as ARM Share Declines in 2006

Originations of adjustable-rate mortgages declined sharply in 2006, as rising short-term interest rates fueled fixed-rate products, Freddie Mac’s annual ARM survey found. But hybrid ARMs gained at the expense of traditional 1-year adjusting ARMs, Freddie said... Read More

Alt Data Improves Credit Reports, Study Finds

Some 54 million potential borrowers lack credit reports, the Brookings Institution says. But if lenders consider additional factors, such as payments for utilities, most of these potential borrowers could qualify for a mortgage, the think tank found... Read More

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