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Inside Nonconforming Markets

November 14, 2008

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Subprime, Alt A Mortgage Purchases No Longer a Priority for TARP

The Bush administration pulled a switcheroo on the mortgage industry this week as the Treasury Department said the $700 billion program initially pushed as a distressed mortgage purchase program will instead focus on almost anything else. Even non-bank financial institutions not currently eligible for the program’s capital injections will be considered for funds... [Includes one graph] Read More

Alt Mortgage Sales to GSEs Slump in October

Sales of alternative mortgages to Fannie Mae and Freddie Mac fell in October from the feeble pace set in the third quarter of 2008. According to the Inside Mortgage Finance MBS Database, the government-sponsored enterprises pooled $3.33 billion of interest-only mortgages, jumbo mortgages and 40-year mortgages in their mortgage-backed securities... [Includes one chart] Read More

GSEs Target Servicers Due to Alt A Problems

Fannie Mae and Freddie Mac are increasing their scrutiny of servicers, including ramping up repurchase requests, due in large part to growing losses on Alt A mortgages. The government-sponsored enterprises also recently announced that they will virtually stop purchasing Alt A mortgages in 2009. Fannie this week posted a $29.0 billion loss for the third quarter of 2008, a quarterly... Read More

Distressed Asset Investors Hold Firm on Bids

A number of companies formed in the wake of the collapse of the subprime market are looking to turn a profit on distressed assets, but sales have been few and far between. Jon Daurio, chairman and CEO of Kondaur Capital, a scratch-and-dent purchaser/servicer, said there is no shortage of mortgages to bid on. He said the number of scratch-and-dent mortgages in the market at the moment... Read More

Skepticism Greets GSE and Servicer Mod Plans

Loan modification plans recently announced by Fannie Mae, Freddie Mac, JPMorgan Chase and Citi are insufficient, according to critics. The plans mimic aspects of the Federal Deposit Insurance Corp.’s modification program for IndyMac Bank but the FDIC suggests that the government still needs to address “appropriate economic incentives to prevent unnecessary foreclosures... Read More

H4H Strict on Income Verification, First Payment

FHA officials warn that the HOPE for Homeowners program contains strict clauses regarding income verification and first-payment defaults. Meg Burns, director of the Office of Single Family Mortgage Development at the FHA, detailed the clauses at a recent audio conference on H4H hosted by Inside Mortgage Finance Publications. H4H borrowers must certify that they did not... Read More

Subprime MBS Losses Expected to Accelerate

Losses on subprime mortgage-backed securities will increase as inventory is liquidated, according to analysts at Standard & Poor’s. Only 17.8 percent of the expected collateral losses on subprime MBS issued between the third quarter of 2005 and the second quarter of 2007 have been taken, according to the rating service. Some $859.4 billion in subprime MBS was issued during the... Read More

FDIC Could Sell IndyMac by End of the Month

The Federal Deposit Insurance Corp. has held IndyMac Bank for a little longer than expected, but the federal regulator this week said a sale is on track. Andrew Gray, a spokesman for the FDIC, said the FDIC will accept bids later this month and may complete a sale in December. A source at IndyMac suggested that the FDIC received an initial round of bids earlier this month. He confirmed that... Read More

News Briefs

The Department of Housing and Urban Development recently implemented new limits on origination fees and loan amounts for home-equity... The Massachusetts attorney general received a preliminary injunction this week prohibiting Option One Mortgage and American... AIG’s Equity One recently transferred the servicing rights on a number of subprime mortgage-backed securities to... Read More

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