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Inside Nonconforming Markets

October 3, 2008

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Conforming Jumbo Business Gains Ground

With their overall business volume dropping sharply in the third quarter, Fannie Mae and Freddie Mac saw significant declines in the flow of alternative mortgages into their securitization program – with one exception. Lenders began to deliver a fairly healthy supply of conforming jumbo mortgages – in particular to Fannie Mae – during the third quarter, according... [Includes two charts and one graph] Read More

Option ARM Landscape Recast

A huge portion of the option ARM business, now essentially in runoff mode, changed hands in the past week as Wachovia and Washington Mutual were sold to new owners. Together, the two companies held some $171.4 billion of option ARMs on their books as of the end of June and represented, by far, the two largest such portfolios in the industry. The third... [Includes one chart] Read More

Court Rules Against Class Action on Option ARMs

The U.S. Appeals Court for the 7th Circuit last week ruled that class-action lawsuits seeking rescissions of option ARMs cannot be brought for alleged violation of the Truth in Lending Act. In a long-awaited 2-to-1 decision, the court said that “rescission is a highly individualized remedy as a general matter, and rescission under TILA is no exception.” The court reversed a lower court’s... Read More

New FHA Refi Program Launched

The Department of Housing and Urban Development this week launched a new FHA alternative loan product designed to give the growing number of underwater mortgage borrowers a chance to refinance to a more economic loan. Authorized by the 2008 housing act, the new HOPE for Homeowners program features an unusual equity-sharing mechanism and underwriting requirements... Read More

Loan Mod Takes Major Part In Market Bailout

Congress this week approved sweeping legislation to inject up to $700 billion in liquidity into distressed mortgage and mortgage securities markets that includes a number of provisions to spur one of the hottest alternative mortgage lending programs: loan modifications. “The loan modification section of the emergency bailout package is not only needed, but it is... Read More

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