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Inside Nonconforming Markets

July 23, 2010

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Regulators Targeting Disclosures on Old and Future Subprime MBS and CDO Transactions

Financial industry regulators are increasingly pursuing disclosure violations for securitized subprime mortgages. A $7.5 million fine by the Financial Industry Regulatory Authority this week against Deutsche Bank Securities follows a record settlement reached by the Securities and Exchange Commission and the establishment of a new office, all relating to securitization disclosures... Read More

FHFA Subpoenas Non-Agency MBS Participants

The Federal Housing Finance Agency issued 64 subpoenas last week seeking documents related to non-agency mortgage-backed securities purchased by Fannie Mae and Freddie Mac. The federal regulator and conservator of the government-sponsored enterprises said the documents will help determine whether the MBS issuers or others are liable for losses the GSEs have suffered due to the investments... Read More

Most Non-Prime Servicers Increase HAMP Mods

Home Affordable Modification Program activity is slowing, though most non-prime servicers increased their HAMP mod activity in June compared with the previous month. Among servicers that predominantly handle non-prime mortgages, only Saxon Mortgage posted a decrease in trial and permanent HAMP mods during the period, according to a new ranking and analysis by... [Includes one chart] Read More

Calls Increase for Lower Conforming Loan Limits

Secondary market participants are increasingly calling for lower conforming loan limits, claiming that the currently elevated limits are hindering the issuance of non-agency jumbo mortgage-backed securities. The latest calls came in response to a request for comment by the Treasury Department and the Department of Housing and Urban Development relating to reform of the housing finance... Read More

Energy-Efficient Mortgage Program Under Fire

The Property Assessed Clean Energy program could cause a subprime-like crisis, or it is a sound way for borrowers to improve their homes and support thousands of jobs. What started in May with simple notices from Fannie Mae and Freddie Mac reminding lenders that the government-sponsored enterprises prohibit loans that have senior lien status to a mortgage has turned into a major battle... Read More

Unexpected Mods for Redwood’s Jumbo MBS

The jumbo mortgage-backed security that industry participants hope will help revive the non-agency sector experienced some unexpected modification activity recently. Five non-delinquent mortgages in Redwood Trust’s SEMT 2010-H1 were modified in June, under what analysts call unique circumstances that do not necessarily signal future problems with the security... Read More

News Briefs

The Federal Deposit Insurance Corp. this week closed a sale of a 40 percent equity interest in a limited... Delinquencies on jumbo mortgage-backed securities increased for the 37th consecutive month in June, according to... President Obama this week signed into law the massive financial reform legislation that includes tough new... Read More

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