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Inside Nonconforming Markets

May 6, 2011

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Outlook Mixed for Non-Agency Market; GSEs and QRMs are Major Concerns

Some investors are ready to resume participation in the non-agency market while most others will take a wait-and-see approach, based on comments made at the secondary market conference sponsored by the Mortgage Bankers Association this week in New York City. Steve O’Connor, senior vice president of public policy and... Read More

New Jumbo Players Optimistic About Future

“The [jumbo] market is much bigger than the banks’ balance sheets,” according to Randy Robertson, a managing director and co-head of securitized products at BlackRock. The firm’s jumbo mortgage real-estate investment trust has been operating for four months and aims to help re-establish the... Read More

Risk-Retention Likely to Limit Non-Agency Market

Mandatory risk-retention requirements will severely limit non-agency mortgage originations and securitization, according to market participants. Even portfolio originations could be hindered due to the pending rule from federal regulators. “Loan availability is likely to be quite restricted in the... Read More

Non-Banks Expect Changes to Servicing Standards

Non-bank servicers are likely to face regulatory scrutiny and mandated changes, according to industry lawyers. And the consent orders recently issued by federal regulators to 14 large banks and thrifts could serve as best practices for non-bank servicers until the expected punishments are levied. “If history is any guide, it’s not going to be... Read More

Ocwen Sees Benefits in Servicing Crackdown

The consent orders recently agreed to between federal regulators and large bank servicers will help Ocwen Financial, according to officials at one of the largest servicers not subject to the enforcement action. “We think these orders enhance our ability to source new business as existing servicers seek to either... Read More

Impressive PPIP Returns Seen as Misleading 1Q11

Purchases of mortgage-backed securities via the Public-Private Investment Program have resulted in returns of about 27.0 percent for taxpayers, according to figures reported by the Treasury Department. However, the impressive profit is based on return on equity alone, excluding loans made to... [Includes one graph and one data chart] Read More

Distressed Assets Paying Off for PennyMac

While working to establish a jumbo whole loan conduit, PennyMac Mortgage Investment Trust has been able to turn profits by investing in distressed mortgages. The real-estate investment trust avoided purchases of mortgage-backed securities during the first quarter of 2011 and increased its profits due to... Read More

Thornburg Trustee Claims Bankruptcy Was Unjust

The trustee for bankrupt former jumbo lender Thornburg Mortgage filed a number of lawsuits last week claiming that the lender’s warehouse lenders made “unjustified” margin calls on Thornburg, forcing the lender into bankruptcy. In a filing with the U.S. Bankruptcy Court in Baltimore, Joel Sher, the trustee of what is now known as... Read More

News Briefs

The House Financial Services’ Subcommittee on Capital Markets and Government Sponsored Enterprises this week approved a mark-up of H.R. 940, “the U.S. Covered Bond Act of 2011.” The mark-up was approved by a voice vote, including two amendments, and is scheduled to receive consideration by the... Read More

Subprime Volume Indicators and ABX Prices

A half page of subprime data.

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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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