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Inside Nonconforming Markets

June 15, 2007

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Fed Urged to Expand HOEPA to Regulate All Subprime Lenders

Congress, consumer advocates and even a fellow federal regulator are pushing the Federal Reserve to use the Home Ownership and Equity Protection Act to crack down on subprime lenders. However, while lenders agree with many of the lending principles the Fed is... Read More

OTS Action May Signal Subprime Crackdown

The Office of Thrift Supervision last week hit American International Group with a $178 million penalty for loans with predatory features made by its subprime affiliates. The recently announced settlement between the OTS and AIG Federal Savings Bank... Read More

Retail Share of Subprime Originations Jumps in 1Q07

The slump in subprime originations in the first quarter of 2007 caused a spike in the retail sector’s share of the overall market. Retail originations accounted for 31.6 percent of subprime volume in the first quarter of 2007, up... [Includes two charts and one graph] Read More

Survey Shows Tightening of Subprime Underwriting

While lenders have tightened underwriting across the mortgage market, the most significant increase in standards has occurred in the subprime sector, according to a new survey. The tightening of subprime guidelines has occurred virtually across the board, in 32... Read More

Accredited and ResMAE Acquired, NC Drops CEO

A pair of struggling subprime lenders were recently acquired by a private equity firm and a hedge fund. Meanwhile, bankrupt New Century has yet to find a buyer and this week dropped its long-time CEO. Lone Star Fund V, a private equity firm, recently acquired... Read More

Assignee Liability, Loan Mods Top ASF Agenda

Mortgage-backed securities investors oppose assignee liability, and such a standard would severely limit mortgage credit, the American Securitization Forum says in a new position paper. However, if such a standard is imposed, it should be applied uniformly across the... Read More

AGs Pursue Appraisers with Subprime Connections

State attorneys general in Ohio and New York are taking action to stem inflated property appraisals as lagging home price appreciation hampers the subprime market. In Ohio, Attorney General Marc Dann has filed multiple lawsuits against seven mortgage brokers, two... Read More

Lack of Data Reporting Hurts Subprime MBS

The rating services look to be getting antsy with regards to the default and loan modification data they receive from issuers of subprime mortgage-backed securities. Moody’s Investors Service and Fitch Ratings recently announced changes that will essentially... Read More

Wall Street Investment Banks Suffering Subprime Problems

Some Wall Street investment banks could be rethinking their involvement in the subprime market after the sector caused a significant decrease in the banks’ earnings. A number of major investment banks helped fuel the boom in the subprime mortgage... Read More

Hotline Suggests It Saves Industry $3.84 Million a Day

Dragged before Congress to testify earlier this year, subprime servicers insisted that they did not benefit from foreclosures. In fact, some estimated that each foreclosure costs servicers $30,000.On that basis, the Homeownership Preservation Foundation estimates... Read More

2006 Subprime MBS Performing Horribly

The 2006 vintage of subprime mortgage-backed securities continues to perform extremely poorly, according to Moody’s Investors Service, with delinquency rates not seen since the 2001 vintage. MBS backed by subprime second liens have shown the worst performance; not... Read More

B&C News Briefs

Federal thrift and banking regulators declined to include certain subprime hybrid mortgages in the recently issued disclosure samples... A study released this week by the Federal Trade Commission shows that borrowers do not understand current... Read More

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