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Inside Nonconforming Markets

October 9, 2009

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Nearly Half of Bank/Thrift HAMP Activity in The Second Quarter of 2009 was Non-Prime

Non-prime mortgages accounted for a significant amount of activity under the Home Affordable Modification Program in the second quarter of 2009, according to new data from federal banking regulators. However, a number of non-prime servicers continue to lag behind the industry average in terms of modifications per delinquent borrowers.Subprime mortgages received... [Includes two charts] Read More

Servicers Concerned About Foreclosure Legislation

Legislation introduced in the Senate last week to ensure that borrowers are evaluated for affordable loan modifications before facing foreclosure does not sit well with some servicers. Anne Canfield, of the Canfield & Associates consulting firm, said “this is a bill that should be taken seriously.” Sen. Jack Reed, D-RI, introduced S. 1731, the “Preserving Homes and Communities Act,” last... Read More

HOEPA Thresholds Go Beyond Subprime

The Federal Reserve’s tough new standards for higher-priced mortgages will capture more than just subprime loans, according to a new analysis of data from the Home Mortgage Disclosure Act. The Fed has warned that it erred on the side of caution when establishing the thresholds, aiming to include a portion of non-subprime mortgages instead of not capturing all subprime originations... Read More

CFPA’s Proposed Preemption Up for Debate

Federal preemption of state laws is a major point of contention in the ongoing debate on the Obama administration’s proposed Consumer Financial Protection Agency. Broadly put, preemption either caused the non-prime market’s problems or had nothing to do with the market’s troubles, according to community advocates and the mortgage industry, respectively. The Obama administration’s... Read More

Funds Launch to Buy a Fraction of ‘Toxic’ MBS

Five of the nine funds established under the Treasury Department’s Legacy Securities Public-Private Investment Program are ready for action. How much of a difference the funds will make in the frozen non-agency mortgage-backed security market remains to be seen. The funds and the Treasury have committed $12.27 billion in equity and debt capital to help banks unload “toxic” securities... Read More

Subprime Share of Originations Fell to 12% in 2008

New data from the Home Mortgage Disclosure Act re-confirm the subprime market’s diminishing market share and declining volume. Only 11.6 percent of the mortgages reported under HMDA in 2008 were higher-priced, down significantly from the historic high of 28.7 percent in 2006 and 18.3 percent in 2007. The Fed defines higher-priced mortgages as those... [Includes one chart and one graph] Read More

ARM Payment Shock Not Necessarily a Problem

Increases in borrower mortgage payments due to ARM resets should be manageable as long as the Federal Reserve keeps interest rates relatively low, according to analysts at FBR Capital Markets. Interest rates are a key concern for servicers as federal loan modification efforts have done little to address negative equity.“Payment shock from ARM resets should not be a problem, as long... Read More

Foreclosure Mediation Seen as Insufficient

Foreclosure mediation programs need to be strengthened to be effective, according to a recent report by the National Consumer Law Center. Since mid-2008, more than 25 foreclosure mediation programs have launched in 14 states, including California, Florida, Nevada, Michigan and Ohio, according to the NCLC’s “State and Local Foreclosure Mediation Programs... Read More

News Briefs

IBM this week agreed to acquire subprime servicer Wilshire Credit from Bank of America. The computer... The mortgage industry is pushing for an extension of conforming jumbo loan limits. “The increased loan... Reverse mortgage lending could cause “the next subprime debacle,” according to a report issued this... Delinquencies on home-equity lines of credit hit 1.92 percent in the second... Read More

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