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Inside Nonconforming Markets

August 22, 2008

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Alt A Market Nearly Disappeared in 2Q08

New originations of Alternative A mortgages sank to a mere $7 billion during the second quarter of 2008, sending the sector to its lowest level since data have been collected about the once-booming market. New Alt A originations fell 65 percent from already depressed levels during the first three months of 2008 and left year-to-date volume at just $27... [Includes two charts and one graph] Read More

FHLBanks Fine-Tune Advance Collateral

Further deterioration in the mortgage market is spurring the Federal Home Loan Banks to tighten lending policies for their increasingly important advances, which could make it more costly for lenders to fund alternative mortgage programs. The Atlanta FHLBank recently implemented substantive revisions to its credit and collateral policy, implementing a new credit risk rating system. “As part... Read More

FHA: Hope for Homeowners On Track

With only five weeks to go before they run into a wall imposed by Congress, FHA officials are working feverishly to launch the new HOPE for Homeowners product that will provide refinancing opportunities for borrowers who owe more than their house is worth.If there were ever misgivings within the Department of Housing and Urban Development about the sweeping Housing and Economic Recovery... Read More

Alt A Lending Practices, Target of AG Lawsuits

A recent spate of state attorney general lawsuits against Countrywide Financial has called into question certain Alt A lending practices, which are now being portrayed as deceptive, unfair and in total disregard of borrowers’ ability to repay. The lawsuits all allege violations of state prohibitions against unfair and deceptive business practices, each claiming that Countrywide... Read More

FDIC Unveils IndyMac Loan Modification Plans

The Federal Deposit Insurance Corp. this week announced an aggressive loan modification strategy for Alt A mortgages it inherited following the collapse of IndyMac that goes beyond current industry loss mitigation efforts. The agency says it will reduce mortgage coupon rates to the level that’s needed to reduce borrower debt-to-income ratios to affordable levels. The blanket loan... Read More

REX Offers Alternative to Home-Equity Loan

Traditional home-equity lending has been among the dominoes to fall in the fast-shrinking mortgage market since the collapse of the subprime sector a year ago. But that hasn’t lessened consumer demand for ways to cash in the equity in their homes. Real Estate Equity Exchange (REX), based in San Francisco, says it has a product that gives homeowners the opportunity to borrow... Read More

SIFMA Cracks Door for Conforming Jumbo Loans

In a major policy reversal, the nation’s largest industry group for Wall Street bond traders has decided to allow high-balance loans into the all-important “To-Be-Announced” market for mortgage-backed securities. The decision by the Securities Industry and Financial Markets Association opens up the nation’s biggest secondary-mortgage market to large loans financed by Fannie Mae, Freddie Mac and... Read More

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