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Inside Nonconforming Markets

June 20, 2008

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B&C News Briefs

Countrywide Financial this month broke a four month subprime mortgage-backed security issuance stalemate with a $171 million... American General Finance’s subprime lender, Wilmington Finance, ceased wholesale originations this week. Wilmington will... The British Bankers’ Association last week announced changes to the London Interbank Offered Rate. Subprime mortgage... Read More

Subprime MBS Losses Might Be Lower than ABX Suggests

Pricing subprime mortgage-backed securities based on the ABX index is likely resulting in over-stated losses, according to analysts. While the indices possibly overstate the total loss estimate for subprime MBS by 18 percent, losses on AAA subprime MBS could be off by as much as 60 percent. According to the Bank for International Settlements, losses to be taken on subprime MBS could hit... Read More

Insurance Renewals Harder To Obtain, Experts Say

While the subprime mortgage crisis is not likely to stymie efforts to renew insurance coverage for most companies, it could make it difficult for some businesses to obtain or renew certain types of insurance for some types of risks. There is more pain to come from the subprime and credit crisis, insurers said even as policyholder counsel warned of “growing... Read More

FHLB’s Subprime Refi Plan Met With Support

A proposal allowing the Federal Home Loan Banks to help refinance troubled subprime borrowers received wide support from the mortgage industry this week. However, the strongest suggested change to the proposed program would expand it to all loans. The Federal Housing Finance Board’s proposed rule would temporarily add authority for the Banks to use an Affordable... Read More

Ocwen Able to Wring Profit From Subprime Servicing

The worsening performance of subprime mortgages has not stopped scratch-and-dent servicer Ocwen Financial from turning a profit. The company attributes its success to loss mitigation and “efficiency” with its employee compensation and benefits. “We have come through one of the most challenging periods in the history of Ocwen,” Bill Erbey, chairman and CEO of the... Read More

Subprime MBS Causes SEC To Propose New Rating Rules

The Securities and Exchange Commission last week proposed an overhaul of rules for ratings services in the wake of massive downgrades of subprime mortgage-backed securities and deterioration of the collateral. “All of the proposed rules that we are considering are born of the subprime mortgage crisis and the resulting credit crunch... Read More

Survey Finds Jurors Favor Borrowers in Subprime Cases

“Subprime is sexy today,” according to Randall Bodner, an attorney at Ropes & Gray. However, lenders have reason to fear that attorneys are interested in the industry for the wrong reason as subprime-related litigation hits record highs this year. At Mealey’s Subprime Mortgage Litigation and Insurance Coverage Conference this week in Arlington, VA, Bodner and a number of... Read More

Legislation Authorizing FHA Refi Program Lurches Ahead

After months of debate, leaders in the Senate this week unveiled a bipartisan compromise omnibus housing bill that includes a program to refinance troubled borrowers via the FHA. However, the bill faces opposition from the White House and an uncertain fate in the House.In addition to the controversial FHA refi program, the revamped Senate bill crafted by Sens. Chris Dodd, D-CT, and Richard... Read More

Subprime Loss Mitigation a Battleground for OCC, Hope Now

Comptroller of the Currency John Dugan called previously issued subprime loss mitigation data into question as the Office of the Comptroller of the Currency issued its own data last week. The OCC’s findings diverge widely with data reported by the Hope Now Alliance, which thus far has been the main clearinghouse for loss mitigation information. “Virtually none of the data... [Includes one chart] Read More

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