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Inside Nonconforming Markets

May 4, 2007

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Dodd Calls for HOEPA Extension To All Loans as Subprime Fix

Sen. Chris Dodd, D-CT, the chairman of the Senate Committee on Banking, Housing, and Urban Affairs, last week urged the Federal Reserve to enforce existing regulation relating to predatory lending and the subprime market. In a letter to Fed Chairman Ben Bernanke... Read More

MBS Investors Wary of Subprime Loan Modifications

As a broad spectrum of mortgage market participants this week agreed to seven foreclosure-avoidance principles drafted by Sen. Chris Dodd, D-CT, MBS contracts and skepticism about the usefulness of loan modifications remain stumbling blocks. Fannie Mae, Freddie... Read More

Fannie Could Refi 80% of Subprime Hybrid ARMs

Four out of every five subprime borrowers facing increased mortgage payments in the next two years will qualify for a refinance with Fannie Mae, according to the government-sponsored enterprise. And the GSEs’ regulator recently confirmed that the GSEs have ample... Read More

Subprime Players Concerned About Impending Guidance

Proposed federal guidance on subprime mortgages could lead to increased liability for lenders, make subprime adjustable-rate mortgages less accessible to first-time and minority homebuyers, trap homeowners in bad loans, and create assorted compliance... Read More

New Century Fails to Find Buyer, Closes Lending Unit

Late this week, New Century Financial closed its subpime unit after failing to find a buyer. With the closure, 2006’s second-ranked subprime lender, according to Inside B&C Lending, laid off 2,000 employees. When New Century filed for bankruptcy in April, it... Read More

Option One, ResCap Face Subprime Hurdles

Two lenders with close ties to private equity investor Cerberus Capital Management face ongoing financing and production problems related to failing subprime loans. Following its announced sale to Cerberus, Option One Mortgage’s warehouse financing has... Read More

Merrill Leads Subprime MBS Shelves in 1Q07

Merrill Lynch’s shelf registration was the most active producer of subprime MBS in the first quarter of this year, according to the Inside Mortgage Finance MBS Database. Merrill issued $10.64 billion in subprime MBS off of its shelf during the... [Includes two charts] Read More

Moody’s Increases Subprime MBS Loss Expectations

Subprime mortgage-backed securities are showing worse performance than previously expected, which will lead to ratings downgrades, Moody’s Investors Service recently warned. And Standard & Poor’s recently downgraded a number of subordinate classes in subprime MBS... Read More

Most Trustees Prepared to Handle Subprime Servicing

Subprime servicers are under increased scrutiny as the performance of subprime mortgage-backed securities continues to decline. If a servicer’s performance deteriorates to the point in which a transfer of servicing is necessary, however, Fitch Ratings found that most... Read More

B&C News Briefs

Following Accredited Home Lenders, Fremont General late in April engaged... Wells Fargo’s subprime lending unit, Wells Fargo Financial, recently settled... Subprime and Alt A wholesaler Millennium Funding Group closed... Massachusetts Governor Deval Patrick directed the state’s Commissioner... Read More