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Inside Nonconforming Markets

December 12, 2008

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Subprime Foreclosure-Starts Drop in 3Q But Slowdown Could be Misleading

A decline in subprime foreclosures continued through November, but analysts warn that activity is likely to increase again in 2009. The total amount of subprime mortgages outstanding also continues to fall, and volume is not expected to increase anytime soon. An analysis by Inside B&C Lending found an estimated $810.0 billion in subprime mortgages... [Includes one chart and one graph] Read More

GSE Non-Prime Holdings Causing Problems

Formerly high-quality subprime and Alt A assets held by Fannie Mae and Freddie Mac have turned into huge liabilities for the government-sponsored enterprises. The GSEs shut down their non-prime purchases this year and aren’t expected back any time soon. However, the GSEs faced harsh criticism from Democrats in Congress this week regarding the mortgages... [Includes one chart] Read More

Prime Jumbo Lender Posts Profits, Struggles

Thornburg Mortgage continued its year of ups and downs as the lender’s stock was de-listed from the New York Stock Exchange last week. After nearly declaring bankruptcy earlier this year, Thornburg reported a profit in the second and third quarters, but the lender’s prime jumbo focus is a concern for investors. Thornburg failed to meet the NYSE’s continued listing standard regarding an absolute... Read More

MBS Investors Resist Calls for Increased Mods

Loan modification proponents have won few allies among non-prime mortgage-backed security investors. While the Federal Housing Finance Agency pleads with investors to allow for more mods, investors have fought back against two other systematic mod efforts.Near the end of November, the FHFA asked investors, servicers and trustees in the non-agency MBS... Read More

Preparations Made for Non-Prime Market Return

Mortgage-backed security investors, the Securities and Exchange Commission and the rating services are all taking steps to revive the frozen non-agency MBS market. However, some suggest that a return for the sector is unlikely until at least 2010. The Securities Industry and Financial Markets Association, the American Securitization Forum, the European... Read More

Treasury Still Considering Foreclosure-Avoidance

The Treasury Department faced harsh criticism in recent weeks from members of Congress regarding the lack of homeownership preservation initiatives included in the Troubled Asset Relief Program. Treasury officials defended their allocation of TARP funds while noting that a foreclosure-avoidance initiative remains under consideration. Sen. Chris Dodd, D-CT, and Rep. Barney Frank, D-MA, said they... Read More

Fed Pins Subprime Problems on Home Prices

Subprime mortgages originated in recent years are more likely to default well ahead of their first mortgage rate resets, and less likely to refinance than previous vintages, according to new research from the Federal Reserve. Shane Sherlund, an economist at the Fed, recently detailed the findings in his paper “The Past, Present, and Future of Subprime Mortgages. ”Nearly half of... Read More

News Briefs

The next issue of Inside B&C Lending will be published... The Massachusetts Supreme Judicial Court upheld a preliminary injunction this week against... The Department of Housing and Urban Development this week clarified borrowers’ recourse for... The Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators this week released a... Read More

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