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Inside Nonconforming Markets

June 19, 2009

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Lack of Originations Harming Subprime Servicers’ Loss Mitigation Efforts

The amount of subprime mortgages outstanding declined again in the first quarter of 2009, according to a new ranking and analysis by Inside B&C Lending, as subprime originations are nearly non-existent. The lack of liquidity has diminished servicers’ loss mitigation efforts, with new incentives from the federal government not expected to help much... [Includes one chart] Read More

Non-Prime Mortgages Targeted in Obama Proposal

Non-prime mortgage originations would be heavily regulated under a sweeping reform proposal unveiled this week by the Obama administration. The proposal would dramatically adjust regulation of the financial services industry, with a strong focus on subprime and nontraditional mortgages. “Exotic mortgages that hide exploding costs will no longer be the norm,” President Obama said. “We’re... Read More

Non-Agency Credit Enhancement Could Increase

If non-agency mortgage securitization ever comes back from the dead, deals will be required to have significantly higher credit enhancement under a proposal from Standard & Poor’s. The rating service is assessing comments received this week on major changes proposed for its mortgage-backed security rating process. “The changes should provide greater stability... [Includes one graph] Read More

OCC to Focus on Reverse Mortgage Enforcement

Reverse mortgages pose “significant compliance risks,” according to Comptroller of the Currency John Dugan. However, Jeff Lewis, chairman of reverse mortgage lender Generation Mortgage, said Dugan essentially yelled “fire” in a crowded, fire-less theater. In remarks last week at the American Bankers Association’s Regulatory Compliance Conference, Dugan delivered... Read More

MBA Defends Servicers in Face of Mod Fraud

Federal and state regulators continue to pursue perpetrators of loan modification fraud while the Mortgage Bankers Association opposes increased regulation of servicers, lenders and lienholders. Last week, the Federal Trade Commission and New York Attorney General Andrew Cuomo took separate actions against foreclosure rescue operations. The House also... Read More

Downey’s Downfall Tied to Option ARMs

A high concentration of option ARMs contributed to the failure of Downey Financial, according to a report released this week by the Treasury Department’s Office of the Inspector General. The Treasury this week proposed the elimination of thrift charters on the heels of the failures of Downey and IndyMac Bank. “The need for a special class of mortgage-focused depository institutions has fallen... Read More

Fremont, Massachusetts Settle Subprime Dispute

Massachusetts Attorney General Martha Coakley won another battle against the subprime industry last week, extracting a settlement from bankrupt former subprime lender Fremont Investment & Loan. Fremont will pay the state $10.0 million for consumer relief, civil penalties and costs, and the company agreed not to foreclose on any “unfair mortgages” without certain protections for... Read More

Mandatory Mediation Proposed for Loss Mitigation

Community advocates are calling on local governments to establish programs to help the borrowers who face foreclosure but are ineligible for the Obama administration’s Making Home Affordable program. According to recent reports by community advocates, borrowers benefit greatly from mediation and financial counseling programs. A study by the Association of Community Organizations... Read More

News Briefs

Beginning this week, borrowers in California facing foreclosure must receive an... The Fair Mortgage Collaborative, a new nonprofit backed largely by community... This week, the FHA increased the loan limit for Energy-Efficient Mortgages... Beginning July 10, Fannie Mae will be responsible for all certification functions... Read More

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