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Inside Nonconforming Markets

February 29, 2008

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Subprime Servicers Face Increased Regulation, Decline in Portfolios

Almost every major subprime servicer posted a decline in its portfolio in 2007 compared with the previous year. The sharp turnaround ends years of growth in the sector. According to Inside B&C Lending, the amount of... [Includes one chart] Read More

Fed Keenly Anticipating HOEPA Revision Comments

Nearly 250 comments have already been submitted to the Federal Reserve on its proposed revision of the Home Ownership and Equity Protection Act, even though they are not due until April 8. Speaking this week at an audio conference on the proposed HOEPA... Read More

Subprime Lenders to Face Increased Litigation

The foundations of the subprime market are under scrutiny as regulators attack the sector’s reliance on securitization and wholesale lending. At the International Quality and Productivity Center’s conference on the subprime market, held this week in... Read More

Cramdown Fight Heats Up As Bush Threatens Veto

The fight over legislation to allow bankruptcy judges to modify residential mortgages intensified this week as President Bush came out strongly against the proposal, siding with the Mortgage Bankers Association, which has fought hard against the plan... Read More

Voluntary Foreclosures Unlikely to be a Problem

Borrowers walking away from their mortgages with the hope of purchasing a cheaper home in two years might not be as prevalent a phenomenon as lenders fear, according to Glenn Schultz, a senior analyst at Wachovia Capital Markets. While some recent news reports... Read More

Valuation of Subprime Securities a Key Concern

The Securities and Exchange Commission is actively investigating issuers and underwriters of subprime mortgage-backed securities, focusing on their valuation of the assets they sold and held. While the investigation is still in the early stages, it already affects... Read More

Fed’s HOEPA Proposal Seen As Best Case Scenario

If the government is going to increase regulation of the subprime market, the industry apparently views rules drafted by the Federal Reserve as the least of three evils. Comments on the Fed’s proposed revision of the Home Ownership and Equity Protection Act are... Read More

Subprime MBS Downgrades, Poor Performance Continue

Analysts suggest investors are unlikely to return to the subprime market in 2008 as the collateral continues to deteriorate. Fitch Ratings continues to issue downgrades, including AAA-rated securities, and Standard & Poor’s warns that there is little... Read More

B&C News Briefs

Employees at First Franklin have reportedly been informed that Merrill Lynch plans on closing or unloading the subprime lender. Merrill said First Franklin stopped originating subprime mortgages at the end of 2007. First Franklin was the fifth-ranked... Read More

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