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Inside Nonconforming Markets

September 19, 2008

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IO Loans Carry Declining Alt Mortgage Market

Interest-only loans have become the mainstay of the conventional alternative mortgage market, accounting for the bulk of the estimated $38 billion in alternative mortgage originations completed during the second quarter. A new analysis by Inside Alternative Mortgage reveals that $35 billion of interest-only loans were originated during the second... [Includes one chart and one graph] Read More

Servicers Ramp Up Loss Mitigation for Alt A

Delinquency rates on Alt A mortgages continued to climb higher in the second quarter of 2008, pushing top servicers to more aggressively pursue loan modifications and other loss mitigation strategies, according to a new report from federal banking agencies.Some 5.83 percent of Alt A mortgages had reached seriously delinquent status as of the end of June, according to the... Read More

HUD Implements New HECM Requirements

The Department of Housing and Urban Development this week implemented new restrictions on an FHA home-equity conversion mortgage program that is holding its own in a mortgage market that has seen an eruption in FHA lending. HUD is working to implement new requirements included in the 2008 housing act designed to protect seniors from coercive... [Includes one chart and one graph] Read More

Increasing Option ARM Defaults Stress WaMu

The continuing upheaval on Wall Street reverberated all the way to Seattle this week, as Washington Mutual, still a top Alt A lender in 2008, accelerated its efforts to drum up more capital or solicit a buyer as losses mount on its option ARM portfolio. This week, private-equity firm TPG Inc., which spearheaded a $7.2 billion capital infusion into the lender in April, gave a boost to that... Read More

HMDA Data Show Drop in ‘Higher-Priced Lending’

Reflecting bad times in the housing and mortgage markets, higher-priced lending plunged as did other segments of the market in 2007. However, the full extent of the decline may not be known because a good chunk of higher-priced loans originated last year by now-defunct lenders went unreported. The share of closed loans meeting the “higher-priced loan” definition under the Home... Read More

Lehman Bankruptcy Puts Alt A Servicing in Play

The bankruptcy filing by Lehman Brothers early this week puts in play one of the largest Alt A servicing portfolios in the market, although the company’s close ties to the non-agency MBS sector suggest that it will be carefully taken care of. Lehman’s Aurora Loan Services, a subsidiary of a Lehman-owned thrift institution, was administering an estimated $124.5 billion of mortgage... Read More

EquityKey Offers Cash for Elderly Homeowners

Despite tumbling real estate values across the country, a handful of lenders are betting on the long-term revival of the market and the increased difficulty of using traditional financing to extract equity from the home. EquityKey, a San Diego-based real estate investment company, is offering a real estate option product targeted to homeowners between the ages of 65 and 85 and... Read More

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