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Inside Nonconforming Markets

January 22, 2010

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Non-Prime Servicers Boost HAMP Mod Efforts, MBA Claims Work is Complete

Non-prime servicers completed more permanent loan modifications via the Home Affordable Modification Program in December than in all prior months combined since the March implementation of the program.Servicers that focus predominantly on non-prime mortgages completed 14,459 permanent HAMP mods in December compared with 13,322 cumulative mods through November... [Includes one chart and one graph] Read More

CFPA Prospects in Doubt, Dodd Seeks Compromise

Senate Democrats’ ability to approve the Consumer Financial Protection Agency was tenuous even before the election this week of a Republican senator in Massachusetts; the prospects for the CFPA are now in even greater doubt. Meanwhile, a coalition of regulators from across the world is calling for minimum underwriting standards for mortgages. The House approved H.R. 4173, “the Wall Street... Read More

DOJ Fair Lending Unit Eyes Non-Prime Lenders

The Department of Justice recently launched a new fair-lending unit, according to remarks by Thomas Perez, assistant attorney general for the civil rights division of the DOJ. The unit will focus, in part, on the predatory practices of non-prime lenders. “As part of the Obama administration’s efforts, the Civil Rights Division is dusting off the Fair Housing Act and the Equal Credit... Read More

Subprime MBS Issuance Expected Within 3 Years

Analysts at Barclays Capital suggest that subprime mortgage-backed security issuance will resume modestly within two or three years. “Ultra-clean prime deals could price in the first half of 2010, in our view, followed by slightly lower credit borrowers as the year progresses,” Barclays projected. “In a recovery environment, we find a return of lower FICO issuance within the... Read More

Non-Agency Performance Problems Far From Over

Warnings regarding the performance of non-agency mortgage-backed securities continue to mount, suggesting that the mortgages will continue to deteriorate. Negative equity is the main concern, along with payment shock from interest rate resets. In a report released last week, the Government Accountability Office estimated that 25 percent of active non-prime borrowers with... Read More

Foreclosure Moratorium Seen as Ineffective

The non-prime foreclosure moratorium Countrywide Financial agreed to in October 2008 appears merely to have increased foreclosure timelines, according to analysts at Barclays Capital. The analysts warn that loss severities on subprime mortgage-backed securities are likely to be greater than currently expected due to increased foreclosure timelines. The analysts found that Countrywide’s... Read More

Subprime Lending, Lobbying, Strongly Linked

Subprime lenders lobbied Congress more intensively than lenders overall in recent years, according to a working paper by the International Monetary Fund’s research department. The IMF researchers determined that lobbying is associated with more risk-taking by lenders and worse mortgage performance. Using a complex formula to gauge specific lenders’ lobbying expenditures and... Read More

News Briefs

Use of Fannie Mae’s HomeSaver Advance dwindled in the third quarter of 2009, according to a... Delinquencies on home-equity loans hit a new record in the third quarter of 2009... The Fair Mortgage Collaborative this week introduced free access to averages for interest rates... Moody’s Investors Service last week placed 38 mortgage-backed security re-securitization... Read More

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