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Inside Nonconforming Markets

January 30, 2009

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Moody’s Warns it Will Downgrade Almost All Alt A MBS, Sector Now Worse than Subprime

Moody’s Investors Service last week quadrupled its projected cumulative loss expectations for Alt A mortgage-backed securities and warned that most deals will be downgraded, many to below investment-grade. The actions confirm that Alt A MBS will perform worse, ratings-wise, than already battered subprime MBS. According to an Inside B&C Lending... [Includes two charts and one graph] Read More

House Committee Approves Cramdown Legislation

Cramdowns are one step closer to becoming law after a markup this week by the House Judiciary Committee. The panel modified legislation based on a recent agreement between Citigroup and Senate Democrats and passed the bill on a 21-15 party line vote. Cramdown proponents on Capitol Hill are expected to attach the legislation, which would reform Chapter 13 bankruptcy law, to a pending... Read More

Federal Help for Non-Prime Market Forthcoming

The Federal Reserve this week announced a loan modification policy similar to a Federal Deposit Insurance Corp. program. And the Obama administration is widely expected to divert a significant portion of the next $350 billion in funding from the Troubled Asset Relief Program to mortgage foreclosure relief. The Fed policy applies to loans or MBS that any Federal Reserve Bank may gain... Read More

Predatory Lending Reform a Possibility this Year

Congress could pass new anti-predatory lending laws this year thanks to expanded Democratic clout in Washington. But such reform is less of a priority for Democrats than the bigger legislative challenges posed by the faltering economy and the relative lack of a non-prime market. Last year, Democrats in Congress deemed the Federal Reserve’s revision of the Home Ownership and... Read More

Wells, Chase the Latest Servicers to Boost Mods

Troubled payment option ARM borrowers with mortgages from Wachovia are eligible for streamlined loan modifications from Wells Fargo, the servicer said this week. Wells joins JPMorgan Chase as the latest major non-prime servicers to significantly increase loan modification efforts. Wells completed its merger with Wachovia at the end of December and is targeting nearly... Read More

GSEs Favored Repayment Plans for Loss Mit

Before implementing a streamlined loan modification plan in December, Fannie Mae and Freddie Mac relied heavily on repayment plans for their non-prime loss mitigation efforts, according to new data from the Federal Housing Finance Agency. The focus on repayment plans flies in the face of other non-prime servicers’ moves to loan modifications. The GSEs note that activity... Read More

Reverse Mortgage Ads, Loan Limit a Concern

The National Reverse Mortgage Lenders Association warns that a number of recent reverse mortgage advertisements are unacceptable. Meanwhile, a further increase in the loan limit on the FHA’s reverse mortgage product is possible this year. NRMLA President Peter Bell said he met with members of the Government Accountability Office in December regarding reverse mortgage... Read More

Fund Looks to Boost Alt A MBS Liquidity

An exchange-traded fund provider is pushing ETFs based on Alt A mortgage-backed securities as a way to increase liquidity and transparency in the nearly frozen Alt A MBS sector. However, some analysts suggest that the funds will do little to revive the non-agency MBS market. This week, Invesco PowerShares Capital Management, a provider of ETFs, filed registration statements for... Read More

News Briefs

The U.S. District Court for the Northern District of California recently denied a motion for... Kondaur Capital Corp., a distressed asset purchaser and servicer, bought nearly... Merrill Lynch announced this month that it will pay $550.0 million to... The Pennsylvania Attorney General’s Office this week reached a... Read More

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