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Inside Nonconforming Markets

January 2, 2009

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IOs Were the GSEs’ Alternative Mortgage Product of Choice as 2008 Came to a Close

Interest-only mortgages dominated sales of alternative mortgages to Fannie Mae and Freddie Mac in November 2008 in a trend that looks to continue this year. According to the Inside Mortgage Finance MBS Database, the government-sponsored enterprises pooled $1.52 billion of interest-only mortgages, jumbo mortgages and 40-year mortgages in... [Includes one chart and one graph] Read More

Non-Prime Loan Modifications Expected to Increase

Non-prime servicers are expected to increase their loan modification efforts in 2009 as the sector’s performance continues to decline. Meanwhile, a debate is brewing about the effectiveness of the mods completed thus far. Completed subprime loan modifications increased slightly in November to 74,000, up 1,000 from the previous month, according to the Hope Now Alliance. Subprime repayment plans... Read More

Fitch Expects ‘Significantly’ More Alt A Losses

A continuing deluge of delinquencies and foreclosures on Alt A mortgage-backed securities in 2008 forced Fitch Ratings to increase its loss projections for the sector. The rating service said the Alt A sector is in a “severe stress scenario,” pushing expected losses “significantly higher” than projections made... Read More

IndyMac Sale Stalls on Fannie’s Buyback Request

The Federal Deposit Insurance Corp. missed its second self-imposed deadline to sell IndyMac Bank as 2008 came to a close due to a conflict with Fannie Mae. Meanwhile, the lender’s federal regulator recently confirmed that it allowed IndyMac to misconstrue its earnings to meet... Read More

MBA Defends its Dire Cramdown Predictions

The Mortgage Bankers Association recently defended the doom and gloom it predicted for borrowers if Congress allows cramdowns on primary residences. The defense came in response to Sen. Richard Durbin, D-IL, who continues to push cramdown legislation and asked the MBA to justify claims made at... Read More

TARP Funds Could Come with Loss Mit Mandate

It looks increasingly likely that Congress will approve the release of additional funds via the Troubled Asset Relief Program. Rep. Barney Frank, D-MA, is leading the charge and looking to guarantee that some of the money goes toward foreclosure prevention. In December, Frank said he will... Read More

Troubling Precedent Seen in Subprime Mod Law

A subprime loan modification “protocol” implemented in December by North Carolina puts increased pressure on servicers and could be adopted by other states, according to a review by industry lawyers. The North Carolina Office of the Commissioner of Banks implemented the protocol as part of a recently created... Read More

Servicers Criticized on Handling of Short Sales

Servicers working with troubled borrowers have not adequately responded to short sale offers, according to a recent survey of real estate agents sponsored by Inside Mortgage Finance Publications. Servicers’ responses to short sale offers can take months, with some real estate agents suggesting that servicers... Read More

News Briefs

The Department of Housing and Urban Development refused requests from the mortgage industry to extend FHASecure. As of Dec. 31, 2008, HUD will not... All of the Federal Home Loan Banks responding to a request for comment from their federal regulator indicated that they would like to see their recently acquired authority to support... Read More

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