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Inside Nonconforming Markets

June 11, 2010

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Portfolio Lending Muted as Bank Mortgage Holdings Decline in 1Q

The absence of a secondary market for non-agency mortgages was expected to result in an increase in portfolio lending by banks and thrifts. That has not been the case as most production has shifted to agency securitization, resulting in declines in bank and thrift mortgage portfolios. According to a new ranking and analysis by... Read More

Subprime Portfolio Lending a Matter of Risk

A recent study of risk-management practices sponsored by the Mortgage Bankers Association suggests that subprime lending can be a viable option for originators – as long as they do a better job adjusting their risk valuation methods. The study found that... Read More

Ocwen Grows Significantly with HomEq Purchase

In a transaction that took nine months to negotiate, Ocwen Financial announced at the end of May that it will purchase subprime servicer HomEq from Barclays Capital. The transaction will make Ocwen the 4th-largest subprime servicer and the 15th-largest overall servicer in the industry, according to Inside Nonconforming Markets. The purchase follows Ocwen’s acquisition in May of $6.9 billion in subprime servicing from Saxon Mortgage. And Ocwen is not done growing... Read More

HAMP ‘Principal Reduction Alternative’ Detailed

Servicers can receive incentives for reducing borrowers’ principal to as low as a 105 percent loan-to-value ratio under new Home Affordable Modification Program guidelines released last week. HAMP’s voluntary Principal Reduction Alternative will be effective Oct. 1, but non-agency servicers can offer the mods immediately. The PRA, initially announced in March, is aimed at borrowers with negative equity. About 18 percent of... Read More

Signs of Life for Jumbo Reverse Mortgages

Jumbo reverse mortgage lending resumed last week as Generation Mortgage started offering a product aimed at seniors owning homes appraised at more than $1 million. While the FHA’s home-equity conversion mortgage is expected to continue to dominate the reverse mortgage market, Jeff Lewis, chairman of Generation, said demand – from borrowers and investors – exists for jumbos. The “GenerationPlus” product is a one-draw, fixed-rate reverse mortgage for... Read More

Subprime Mortgages Still a Fair Lending Focus

Federal and state regulators continue to scrutinize lenders’ subprime originations for fair lending violations, according to participants of a Webinar hosted by Inside Mortgage Finance Publications this week. Eric Halperin, special counsel for fair lending at the Department of Justice, said steering into higher-priced mortgages, redlining, reverse redlining and mortgage broker actions are all priorities. He said the DOJ is currently conducting... Read More

Moody’s Faulted for Chasing Market Share

Former analysts at Moody’s Investors Service blamed the poor performance of mortgage-backed security ratings on the rating service’s quest for market share. At a hearing last week by the Financial Crisis Inquiry Commission, Phil Angelides, chairman of the FCIC, called Moody’s “a Triple-A factory.” Angelides noted that Moody’s placed Aaa ratings on 9,029 MBS in 2006 alone. According to the Inside Mortgage Finance MBS Database, Moody’s rated... Read More

GSEs Could Receive Manufactured Housing Duty

Fannie Mae and Freddie Mac could play a “significant role” in the financing of manufactured housing mortgages, according to a proposed rule from the government-sponsored enterprises’ federal regulator. Last week, the Federal Housing Finance Agency released a proposed rule detailing potential “duty to serve” provisions for the GSEs regarding manufactured housing, affordable housing and rural housing. The FHFA proposed that... Read More

News Briefs

The House and Senate formally started the conference on financial reform legislation this week. Democrats hope to finish the process by June 26, setting up the potential for final House and Senate passage the week of June 28 and the bill being signed into law by July 4. Jumbo borrowers in California have a new lender to choose from as... Read More

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As homeowner equity continues to build, more and more lenders are launching home equity lending products. Are you thinking of joining this market?

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