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Inside Nonconforming Markets

December 18, 2009

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Three Non-Prime Servicers Account for 39% of All Permanent HAMP Mods

JPMorgan Chase, Ocwen Financial Corp. and Aurora Loan Services accounted for a whopping 38.8 percent of all permanently restructured loans under the Home Affordable Modification Program through November, according to a new Inside B&C Lending analysis. However, most non-prime servicers continue to perform below the industry average for HAMP activity... [Includes two charts] Read More

Financial Reform Bill Notable for What it Lacks

The massive financial reform legislation approved last week by the House could significantly alter the non-prime market, according to mortgage industry lobbyists. But lawmakers opted not to include a “plain vanilla” loan requirement that could have severely limited originations of non-prime mortgages, and they limited the bill’s risk-retention requirements while expanding its federal preemption... Read More

FDIC Considers Risk-Retention

The board of directors of the Federal Deposit Insurance Corp. this week approved an Advance Notice of Proposed Rulemaking regarding safe-harbor protection for securitizations. The ANPR seeks comments on potential standards for securitizations created by FDIC-insured institutions after March 31. Among other proposals, the FDIC is considering a 5 percent risk-retention requirement... Read More

Conflicts Hinder Option ARM Modifications

A number of conflicts are preventing servicers from implementing what many believe is the best loss mitigation tactic for option ARMs: principal forgiveness. An estimated $500 billion in option ARMs are outstanding. During an Inside Mortgage Finance Publications audio conference this week on option ARMs, panelists suggested that forgiving principal will take at least... [Includes one graph] Read More

PPIP Success Uncertain Due to Asset Prices

The success of the federal government’s program to increase liquidity for “legacy” mortgages and non-agency mortgage-backed securities remains far from certain. While the Treasury Department claims that the announcement alone of the Public-Private Investment Program helped boost prices of legacy assets, few transactions have been completed. “Some major financial institutions continue to... Read More

Calls for Changes to HAMP Program Increase

Financial reform legislation approved last week by the House includes a provision to require the Treasury Department to publicly release the net-present value formula for the Home Affordable Modification Program. NPV disclosure is just one of many aspects of HAMP that community advocates are looking to change. At a hearing by the House Financial Services Committee last week, Molly Sheehan... Read More

SEC Charges New Century Officers with Fraud

The Securities and Exchange Commission last week charged three officers of the long-defunct subprime lender New Century Financial with fraud. The charges are the latest in the agency’s attempt to hold accountable those who committed fraud in the subprime industry.The SEC alleged that New Century sought to assure investors that its business was not at risk and was performing... Read More

Wholesale Lender Touts Subprime Offerings

“B&C LENDING IS BACK!!!!,” according to a recent email advertisement from All Credit Considered Mortgage. The wholesale lender claims that it does not require a minimum credit score and will allow stated- or no-documentation in certain situations. ACC was established in 1999 by Robert Senko. The private lender, based in Rockville, MD, is unrelated to the ACC affiliated with... Read More

News Briefs

Ohio Attorney General Richard Cordray this week filed a lawsuit against... Moody’s Investors Service this week increased its loss projections for jumbo mortgage-backed... The American Securitization Forum this week released final model representations and... Prices on 2005 vintage subprime mortgage-backed securities have fallen in recent months... Read More

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