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Inside Nonconforming Markets

February 11, 2011

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Obama Administration’s GSE Plan Would Expand Non-Agency Market

The nonconforming mortgage market would begin to grow for the first time in three years under a plan for reform of the mortgage market outlined by the Obama administration... [includes one graph] Read More

Fitch to Link Jumbo MBS Ratings to Home Prices

Ratings on new jumbo mortgage-backed securities would be strongly tied to home prices under a proposal by Fitch Ratings. Rui Pereira, a managing director and head of Fitch’s residential MBS rating team, said the rating service is looking to associate rating stress-levels with home-price corrections and macro-economic developments... Read More

ARM Origination Share Beginning to Rebound

After falling to account for only 6.3 percent of originations in 2009, the ARM share of total originations increased in 2010. ARM originations remain depressed compared with historical levels, but analysts project that ARM lending will continue to increase this year... Read More

Majority of HAMP Mods Have Been Subprime

The median credit score for borrowers with active modifications in the Home Affordable Modification Program at the end of November was 570, according to new disclosures by the Treasury Department. Last week, the Treasury detailed a number of HAMP mod characteristics for the first time... [includes one graph] Read More

BofA Cordons Off ‘Legacy Assets’ (Countrywide)

Bank of America announced a reorganization of its servicing platform last week in an effort to distance itself from mortgages originated by Countrywide Financial. BofA created a new unit, “Legacy Asset Servicing,” to handle all of the lender’s defaulted mortgages and discontinued residential mortgage products... Read More

Buybacks Possible for 43% of Non-Agency MBS

Some 43 percent of the outstanding non-agency mortgage-backed securities issued in recent years are at risk for buybacks, according to analysts at Fitch Ratings. In a report issued last week, Fitch warned that $460.4 billion in outstanding non-agency MBS – almost all of which was issued by the big five banks or their affiliates – is at risk for repurchase... Read More

PennyMac’s Focus: Distressed Assets, New Jumbos

Officials at PennyMac Mortgage Investment Trust said they will focus on investing in distressed mortgages as well as new jumbo production in 2011. Even though distressed mortgages offered for sale by banks lagged at the end of 2011 and the jumbo market has yet to re-start, Stanford Kurland, chairman and CEO of PennyMac, said he is optimistic... Read More

Regulators Reflect on Lack of Subprime Regulation

Federal regulators remain divided on what impact the lack of subprime regulations had on the collapse of financial markets, according to a report by the Financial Crisis Inquiry Commission. The FCIC concluded that lenders were operating on a highway where there were neither speed limits nor neatly painted lines... Read More

News Briefs

BlackRock is reportedly close to approving 10 lenders for its planned jumbo mortgage conduit... A borrower recently sued non-prime servicer Aurora Loan Services for improperly modifying his ARM in 2008... Angelo Mozilo and David Sambol, former officers of Countrywide, agreed to a $6.5 million settlement last week with California Attorney General Kamala Harris. Read More

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