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Inside Nonconforming Markets

January 16, 2009

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Non-Prime MBS Issuance Almost Hit Zero in the Second Half of 2008, Little Expected in 2009

Issuance of non-prime mortgage-backed securities all but ground to a halt in the second half of 2008. The outlook for 2009 is more of the same as investors avoid the sector and lenders focus on higher-quality borrowers. Only $1.2 billion in non-prime MBS were issued during the... [Includes one graph] Read More

Alt Mortgage Sales to the GSEs Fell 68.7% in 2008

Sales of alternative mortgages to Fannie Mae and Freddie Mac declined significantly in 2008, even with the creation of the conforming jumbo programs. According to the Inside Mortgage Finance MBS Database, the government-sponsored enterprises pooled $68.03 billion of interest...[Includes two charts] Read More

Cramdowns Likely After Citi's Compromise

Citi broke from other lenders last week and brokered a compromise on cramdown legislation pending in Congress. Lender trade groups opposed the compromise but the legislation looked likely to pass even without the limitations Citi brokered. Sen. Richard Durbin, D-IL, reintroduced... Read More

Division Seen in Loss Mitigation Strategies

Industry participants remain divided on whether a uniform approach to loan modifications is the best way to handle loss mitigation. During an audio conference this week hosted by Inside Mortgage Finance Publications, Laurence Platt, a practice area leader at the law firm... Read More

IndyMac Set to Resume Production After FDIC Sale

The private equity firms that purchased IndyMac Federal Bank plan to focus on mortgage lending and servicing, according to the Office of Thrift Supervision. While the lender has a large portfolio of Alt A loans, IndyMac abandoned the sector in 2008 and shut down its... Read More

Treasury Urged to Use TARP for Asset Purchases

Lobbyists this week moved to ensure that the Troubled Asset Relief Program lives up to its name. This week, the Senate approved the release of TARP’s remaining $350 billion. The Senate voted 52-to-42, defeating a resolution to prevent the release of the funds. The House could... Read More

Subprime Lenders Reemerge at the FHA

Lenders no longer able to function in the subprime market have easily migrated to the FHA, according to industry trade groups and the Department of Housing and Urban Development’s federal watchdog. At a House Financial Services Committee hearing last week, concerns were... Read More

FTC Targets ARM and 'Foreclosure Rescue' Ads

The Federal Trade Commission last week announced settlements with four firms regarding deceptive advertisements for ARMs and a faulty foreclosure-rescue scheme. The FTC charged American Nationwide Mortgage Co., Good Life Funding and Innova Financial Group with deceptively... Read More

Outlook Grim for 2007 Subprime Originations

Subprime mortgages originated as the sector was collapsing in 2007 are on pace to perform incredibly poorly. Analysts at Barclays Capital predict that as many as 85 percent of the remaining non-delinquent subprime mortgages originated in 2007 will eventually default... Read More

News Briefs

Wells Fargo suspended wholesale jumbo lending last week due to “low market demand and higher risks.” The lender noted that it continues to offer jumbo mortgages via correspondent and retail channels. JPMorgan Chase, meanwhile, ceased all wholesale lending this week and will focus... Read More

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