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Inside Nonconforming Markets

December 4, 2009

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Treasury Threatens Penalties For Slow HAMP Progress

Non-prime servicers can expect increasingly close scrutiny from the Treasury Department because of the low conversion rate of trial Home Affordable Modification Program mods into permanent restructured loans. The Treasury this week threatened to subject servicers to unspecified consequences including monetary penalties for failing to meet performance obligations... [Includes one graph] Read More

Option ARM Defaults Expected to Continue

Performance problems exhibited by option ARM borrowers are set to worsen due to negative amortization, according to a new analysis by Standard & Poor’s. Analysts at the rating service found that even if interest rates stay at low levels, most option ARM borrowers will see large increases in their monthly mortgage payments. As of the end of October, the delinquency rate... Read More

Fannie Mae Increases Conforming Jumbo Activity

Fannie Mae continues to dominate the mortgage industry’s relatively small conforming jumbo sector. While the government-sponsored enterprise increased its conforming jumbo activity in the third quarter, the mortgages with balances of between $417,000 and $729,750 account for a minimal share of total originations. Fannie had securitized $51.49 billion in... [Includes one chart] Read More

House Committee Approves Regulatory Overhaul

The House Financial Services Committee this week approved financial stability legislation that includes a 5 percent risk-retention requirement for securitized mortgages. Meanwhile, the industry continues to push the Senate to decrease proposed risk-retention levels to match legislation in the House. The committee approved H.R. 3996, the Financial Stability Improvement Act, on a 31-27 vote... Read More

Self-Help Testing Subprime Lease-Purchases

Subprime borrowers can lease a home and develop the financial wherewithal to buy the house via a new program from Self-Help. The community development lender is piloting the product in three cities with the hope that nonprofit organizations will offer it. Vanita Kalra, a senior project manager at Self-Help, detailed the program in the fall issue of the Office of the Comptroller of the Currency’s... Read More

Most Borrowers with Negative Equity Have ARMs

Most “underwater” borrowers have ARMs, according to new research by First American CoreLogic. And analysts at Amherst Securities Group warn that negative equity is a much more significant predictor of defaults than unemployment. As of the third quarter of 2009, First American CoreLogic found that most borrowers with negative equity have ARMs originated between 2005 and 2008. The borrowers... Read More

News Briefs

The Treasury Department this week unveiled details on the short sale and deed-in-lieu of foreclosure components of... Half of the capital that could go toward purchases of non-agency mortgage-backed securities via the Public-Private... Fannie Mae’s new First Look Initiative gives owner-occupants and buyers using public funds 15 exclusive days to make... Read More

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