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Inside Nonconforming Markets

July 2, 2009

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Jumbo Sector Shows Signs of Life In Second Quarter of 2009

Fannie Mae dramatically increased its issuance of conforming jumbo mortgage securities in the second quarter of 2009. And JPMorgan Chase and CitiMortgage recently announced that they will resume making jumbo mortgages, marking a potential revival for the nearly dormant sector. According to the Inside Mortgage Finance MBS Database... [Includes one chart and one graph] Read More

‘Vanilla’ Mortgage Proposal Gains Momentum

Proposals to discourage alternative mortgage originations appear to be on the fast track as the Obama administration this week released draft legislation to create a new federal policy on mortgage lending and a new regulator, the Consumer Financial Protection Agency, to enforce it. Rep. Barney Frank, D-MA, chairman of the House Financial Services Committee, said he expects that... Read More

Non-Prime Modifications Increase in 1Q09

Non-prime loan modifications increased again in the first quarter of 2009 and are set to grow going forward as servicers implement the Obama administration’s Home Affordable Modification Program. Some 23 servicers have been approved for the program, with $17.98 billion in incentive payments authorized for the firms, whose portfolios account for the vast majority of outstanding... Read More

Slow Non-Prime Loss Mit a Concern for Investors

Impediments to non-prime servicers’ loss mitigation efforts are a significant concern for mortgage-backed security investors. Second liens and extended short sale timelines are especially problematic, according to Tom Deutsch, deputy executive director of the American Securitization Forum. Deutsch detailed MBS investor concerns during an audio conference on loss mitigation... Read More

Non-Prime Home Price Declines Nearly Finished

“The bottom is getting closer, but we are not there yet,” according to analysts at Deutsche Bank. The majority of home price declines have already occurred in the areas with the largest concentration of non-prime mortgages outstanding, according to analysts at the investment bank. While the analysts expect home prices to decline by more than 40.0 percent from peak-to... Read More

Pricing Limiting Non-Prime Mortgage Sales

Potential non-prime mortgage buyers continue to offer low bids on non-prime mortgage pools, limiting sales by mortgage holders. However, new research by Fitch Ratings suggests that non-agency mortgage-backed securities are being mispriced by investors. Fitch analyzed a number of non-agency MBS transactions and found “a large differential between... Read More

Nontraditional Originations Lead to Settlement

The regulatory fallout from the non-prime lending boom of years past continued last week with a settlement between Taylor, Bean & Whitaker Mortgage Corp. and 14 states. TBW will modify loans for struggling homeowners and pay $9 million in fines as part of the settlement. The state regulators alleged that TBW allowed exceptions related to underwriting... Read More

News Briefs

Later this year, the Federal Financial Institutions Examination Council will issue proposed guidance on consumer... Federal banking regulators are seeking comments on an interim final rule that would provide that mortgage loans... First American Valuation and Property Solutions this week unveiled a new tool to help servicers and portfolio... Read More

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