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Inside Nonconforming Markets

August 6, 2010

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PPIP Funds Post Profits on Non-Agency MBS Purchases, Help Increase Collateral Prices

The Public-Private Investment Program has contributed to a recovery in the prices of non-agency mortgage-backed securities while generating profits for participating funds, according to the Treasury Department. Every public-private investment fund has turned a profit, largely by purchasing non-agency MBS. Through the second quarter of 2010, the eight public-private... [Includes one chart] Read More

Ocwen: Distressed Portfolio Sellers Unwilling to Sell

Due to recent acquisitions, Ocwen Financial will be the third-largest subprime servicer, according to Inside Nonconforming Markets. While the servicer is looking to expand its portfolio further, executives at Ocwen have found that sellers of distressed mortgage portfolios have been unwilling to make deals. “The biggest challenge we have in getting product is really the decision on... Read More

Subprime Disclosure Lawsuit Settlements Continue

Citigroup, New Century Financial and Bank of America were the latest to settle with federal regulators and investors regarding subprime mortgage-related disclosures. The settlements are part of an increase in enforcement led by the Securities and Exchange Commission. “The rules of financial disclosure are simple – if you choose to speak, speak in full and not in... Read More

FDIC Securitizes Mortgages from Failed Banks

The Federal Deposit Insurance Corp. last week helped facilitate the issuance of a non-agency mortgage-backed security backed by mortgages from failed banks. The privately placed issuance – part of a pilot program – marked the first time the FDIC has sold assets in a securitization since the implosion of the non-agency MBS market.The MBS was backed by $471.3 million... Read More

MBS Investors Attracted to Rural Housing Loans

The U.S. Department of Agriculture’s mortgages for borrowers in rural areas have attracted the attention of mortgage-backed security investors. And changes to the program recently approved by Congress are expected to increase investor interest. Appropriations legislation signed by President Obama in July included additional funding for USDA Rural Housing Service mortgages... [Includes one graph] Read More

Stark Differences on Future Form of Risk Retention

With the Dodd-Frank Wall Street Reform and Consumer Protection Act all but guaranteeing that the non-agency mortgage-backed security market will face mandatory risk retention, non-agency participants have shifted the debate to what form risk retention should take. The latest squabble played out in comments submitted to the Securities and Exchange Commission regarding proposed... Read More

Subprime Losses Tied to Home Price Trends

New research by the International Monetary Fund suggests that historic home price activity can predict the loss severity on future subprime originations. Meanwhile, research by the Center for Responsible Lending suggests that minorities have been disproportionately impacted by subprime foreclosures in recent years.Yanan Zhang, Lu Ji, and Fei Liu detailed Read More

News Briefs

The House last week approved an extension of the $729,750 high-cost conforming loan limit... The Obama administration this week approved plans in five states for a total of $600 million... The 6th Circuit U.S. Court of Appeals last week confirmed a lower court’s motion to dismiss... Read More

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