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Inside Nonconforming Markets

April 20, 2007

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Subprime MBS Issuance Falls in 2007; Investment Banks Dominate

Issuance of subprime mortgage-backed securities declined as expected in the first quarter of 2007, falling 18.4 percent compared to the previous quarter. Some $94.82 billion in subprime MBS was issued in the first quarter of 2007, according to... [Includes two charts] Read More

GSEs Loosen Standards For Subprime Refis

Fannie Mae and Freddie Mac announced this week that they will offer special products to subprime borrowers facing increased mortgage payments. At a House Financial Services Committee hearing this week on foreclosures, Daniel Mudd, president and CEO of Fannie Mae... Read More

Regulators, Congress Push For Loan Modifications

The end result of two “summits” and two hearings in Congress this week on subprime problems and their relation to the securitization industry seems to be a move toward loan modifications. However, it remains to be seen how much can be done considering that the terms... Read More

Frank Details Anti-Predatory Lending Legislation

Anti-predatory lending legislation to be introduced by Rep. Barney Frank, D-MA, will address federal preemption and crack down on lender incentives, the congressman said. Frank, the chairman of the House Financial Services Committee, sent a letter to his... Read More

Groups Weigh Subprime Foreclosure Fix

Lawmakers are looking to stem the growing number of subprime foreclosures as community groups egg them on. However, any legislative solutions that mandate alterations in a mortgage’s term might run into trouble, according to mortgage securities attorneys... Read More

Supreme Court Affirms Federal Preemption

The U.S. Supreme Court this week settled a key federal preemption issue for federally chartered lenders with mortgage operating subsidiaries. The court ruled that mortgage business conducted through the bank or the subsidiary is subject to federal, not state... Read More

Option One Sold as Subprime Lender Woes Continue

Friday morning, H&R Block announced an agreement to sell Option One Mortgage Corp. to an affiliate of investment firm Cerberus Capital Management. The sale, which took longer than H&R Block had hoped, will be for less than the lender’s book of value, H&R Block... Read More

Bear Stearns, New Century Face Repurchase Lawsuits

Bear Stearns and New Century Financial are facing lawsuits seeking $20 million and $3.8 million, respectively, for alleged breaches of loan performance and servicing agreements. While industry attorneys expect an increase in such suits, they also suggest that lenders’... Read More

Fitch: Risk-Layering Cause Of Recent Subprime Defaults

Credit scores, once a leading indicator of projected borrower payment performance, have been less reliable in predicting defaults for recently originated subprime mortgages. A recent analysis by Fitch Ratings found that early-payment defaults are on the rise due... Read More

Senate Report Details Foreclosure Options

A new report issued by Democrats on the Senate’s Joint Economic Committee found that every foreclosure can cost stakeholders up to $80,000, when adding up the costs to homeowners, lenders, neighbors, and local governments. The report suggests that in the short term... Read More

Bankruptcy Law Favors Lenders, Groups Carp

A group of attorneys and consumer advocates is calling for changes in bankruptcy laws that would allow bankrupt borrowers facing foreclosure to pay lenders less than the full amount due on a mortgage if it is more than the value of the home. The National... Read More

B&C News Briefs

Delta Financial this week announced that its... Accredited Home Lenders recently engaged... The Federal Housing Finance Board has issued a directive... An analysis of mortgages in Philadelphia found that... Some 30,000 nonprime borrowers are now enrolled in... Read More

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