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Inside Nonconforming Markets

October 5, 2007

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Investment Banks, WaMu, Take Big Hits From Subprime Exposure

The subprime mortgage crisis is biting hard at the ankles of more giants, as several top investment banking firms announced this week that their earnings would be depressed because of exposure to the U.S. subprime market, including a revelation that Citigroup... Read More

Servicers, Investors at Odds As Defaults and Costs Rise

Subprime servicers warn that their costs continue to climb as delinquencies and foreclosures hit record levels, with no relief in sight. Meanwhile, investors report being less than pleased with servicers’ loss mitigation techniques. At Information Management... Read More

Rise in Private Mortgages, Hard Money Loans Predicted

Playing a soothsayer in a city that thrives on odds, Richard Benson, president of Specialty Finance Group, an investment bank, predicted an increase in subprime private mortgages. “I see a booming business sometime soon in private mortgages,” he said at... Read More

S&P Continues to Dominate Subprime Securities Ratings

Standard & Poor’s continued to rate nearly all subprime mortgage-backed securities issued through the first two quarters of 2007, covering 98.0 percent of the dollar volume. The rating service held its dollar volume share steady... [Includes one chart and one graph] Read More

Subprime MBS Declines, GSE Classes Gain Greater Share

Subprime mortgage origination and securitization is down significantly compared to the previous year, but the share of subprime mortgage-backed securities eligible for sale to the government-sponsored enterprises is on the... [Includes one chart] Read More

Democrats’ Subprime Plans May Include Suitability

Democratic Congressional leaders demanded action on the subprime mortgage crisis this week, a strong indication that they plan to make it an issue in the 2008 elections. On a more substantive level, law-makers are preparing to introduce legislation with the two... Read More

Moody’s Urges Increased Disclosure on Subprime MBS

Moody’s Investor Services is urging the MBS industry to increase disclosure and transparency in the subprime mortgage securitization process to help the ratings services better monitor risk. After a record setting wave of subprime MBS downgrades – Moody’s alone has... Read More

Servicers Employing Novel Techniques to Stem Defaults

Servicers are pulling out all of the stops to try and put a stop to rising delinquencies and foreclosures, with techniques that go well beyond handwritten personalized envelopes, revealed participants in an audio conference sponsored by Inside Mortgage... Read More

Subprime Bankruptcies Fertile Ground for Lawsuits

Legal issues have become a growing concern for many involved in the subprime industry. Claims from distressed borrowers against loan originators have begun to increase, as have actions pitting business partners against each other and claims against purchasers of... Read More

B&C News Briefs

NetBank Inc., an online bank with $2.5 billion in assets, was shut down by the government last week because of an excessive level of mortgage defaults. NetBank, which had no physical branches, sustained significant losses last year “primarily due to early... Read More