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Inside Nonconforming Markets

March 25, 2011

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Some Banks Aggressively Using Portfolios To Fund Nonconforming Mortgage Loans

Despite heavy refinance activity, declining house prices and the lure of the government-backed securitization market, banks and thrifts managed to increase their retained first-lien mortgage portfolios in 2010 – including a measurable jump in the fourth quarter... [Includes one chart and one graph] Read More

QRM Proposal to Include Servicing, Downpayments

The proposed rule on qualified residential mortgages will include provisions on servicing and downpayments, according to federal regulators. The board of directors of the Federal Deposit Insurance Corp. is scheduled to vote on the proposed rule next week... Read More

Republicans Seek $417,000 Conforming Loan Limit

Republican-sponsored government-sponsored enterprise reform legislation introduced last week would reset the conforming loan limit at $417,000. Rep. Jeb Hensarling, R-TX, the bill’s main sponsor, said the “GSE Bailout Elimination and Taxpayer Protection Act” would greatly reduce the federal government’s role in mortgage finance... Read More

Covered Bonds Seen as Source of Jumbo Funding

The covered bond regulatory framework under consideration by Congress could help fund jumbo mortgage originations, according to industry analysts. Bipartisan legislation to encourage covered bond issuance was recently introduced in the House, though the funding scheme faces some opposition from the Federal Deposit Insurance Corp... Read More

Former Thornburg CEO Starting a Jumbo Lender

Larry Goldstone, co-founder and former CEO of Thornburg Mortgage, is leading an effort by a venture capital firm to develop a jumbo lending platform. Goldstone is the president and CEO of Aventur Partners, which is developing Aventur Mortgage Capital... Read More

FDIC Sues Regarding WaMu’s Risky Lending

The Federal Deposit Insurance Corp. is looking to hold former executives of Washington Mutual liable for the bank’s non-prime lending. The FDIC last week filed a lawsuit against three former WaMu officers (and two of their wives) seeking $900 million in damages due to alleged negligence... Read More

Price Negotiations Likely Hampering Litton’s Sale

The potential sale of Litton Loan Servicing by Goldman Sachs is likely being stalled by differences regarding how much the servicer is worth. Goldman confirmed last week that it is trying to sell the special servicer. The investment bank was also reportedly in unsuccessful sale negotiations at the end of 2010... Read More

Program Design Hinders HAMP Add-On Programs

Design issues – some of them intentional – have severely hindered activity in the second lien, short sale and principal reduction components of the Home Affordable Modification Program. The Treasury Department continues to claim that the criticism is largely unwarranted... Read More