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Inside Nonconforming Markets

July 11, 2008

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Financial Freedom Boosts HECM MBS Issuance

Securitization of reverse mortgages seems to be picking up steam as three deals were issued in June. The loans, made by IndyMac’s Financial Freedom, doubled the total number of home-equity conversion mortgages securitized via Ginnie Mae. Ginnie launched its HECM mortgage-backed security program in November. The program has seen $648.0 million in issuance... Read More

HUD to Implement FHASecure Expansion

The expansion of FHASecure and risk-based pricing of FHA premiums are set to go live July 14. The Department of Housing and Urban Development announced the changes in May. Under the expanded program, borrowers who have missed up to three months in mortgage payments over the previous 12 months, as well as homeowners who have experienced temporary economic hardships... Read More

HOEPA Revision Due Next Week

The Federal Reserve next week will unveil a final rule aimed predominantly at subprime lending. Officials at the federal regulator said the revision of the Home Ownership and Equity Protection Act will incorporate comments on the proposed rule. The mortgage industry warned that tougher standards under the proposed rule would... Read More

Home-Equity Problems Continue to Mount

Many lenders are reducing or suspending home-equity lines of credit due to declining home values and growing risk of loss, but federal regulators say lenders need to be wary of consumer protection laws. In recent guidance, the Federal Deposit Insurance Corp. noted that the increasingly common risk management practice of reducing or suspending HELOCs could conflict with the Truth in Lending... Read More

Alt A Loss Mitigation a Mixed Bag for Thrifts

Alt A delinquencies fell slightly at major thrifts in the first quarter of 2008, though the borrowers consistently received the lowest number of new loan modifications during the period. The Office of Thrift Supervision surveyed Countrywide Financial, IndyMac, Merrill Lynch, Wachovia and Washington Mutual. The servicers handled 11.4 million first lien residential mortgages... Read More

IndyMac Stops Most Originations, Warns of Loss

At the beginning of this week, former Alt A stalwart IndyMac ceased all loan originations save for reverse mortgages and servicing retention. The lender stopped accepting loan submissions or rate locks via its retail and wholesale channels because it is no longer “well capitalized” and was unable to raise capital in recent weeks. “While the managers and employees in these units have... Read More

Neg Am No Longer an Option at Wachovia

At the end of June, Wachovia immediately waived all prepayment fees associated with its Pick-A-Pay mortgages to allow borrowers “complete flexibility in their home financing decisions.” And going forward, Wachovia said it will no longer offer products that include payment options resulting in negative amortization.The move follows the lender’s previous announcement, made just... Read More

IO Sales to the GSEs Continue to Decline

After peaking in the second quarter of 2007, sales of interest-only mortgages to Fannie Mae and Freddie Mac continued to decline in the most recent period, according to the Inside Mortgage Finance MBS Database. Lenders sent $19.1 billion worth of the mortgages to the government-sponsored enterprises in the second quarter of 2008, a 65.1 percent drop compared with... [Includes two charts and one graph] Read More

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