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Inside Nonconforming Markets

November 21, 2012

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Subprime Servicing Shift to Nonbanks Raises Concerns About Regulation

According to the latest subprime servicer ranking from Inside Nonconforming Markets, only two major servicers increased their subprime portfolios at the end of the third quarter of 2012 compared with either the previous quarter or the third quarter of 2011: Ocwen Financial and Homeward Residential, which Ocwen intends to acquire in December. Both of the servicers – and eight of the top 15 subprime servicers – are nonbanks. Nonbank special servicers have increased their ... [Includes one data chart] Read More

Little Seasoning on Redwood’s Latest Jumbo MBS

Redwood Trust issued a $301.46 million non-agency jumbo mortgage-backed security last week with the shortest seasoning period yet on the real estate investment trust’s post-crisis issuance. Loans included in the MBS were seasoned an average of 1.1 months due to Redwood’s increased loan purchase activity. Average loan seasoning on the eight other non-agency jumbo MBS deals issued by Redwood since 2010 has varied from 8.6 months on a deal in 2011 to 1.9 months on the deal Redwood issued in October ... Read More

RMBS Working Group Files Lawsuit, Settlements

Members of the Residential Mortgage-Backed Securities Working Group filed a lawsuit this week against Credit Suisse Securities and reached separate settlements last week with JPMorgan Securities and Credit Suisse. New York Attorney General Eric Schneiderman, a co-chair of the working group, said federal and state regulators are working on a number of other actions. “We’re a long way away from wrapping this up,” he said. The lawsuit against Credit Suisse was filed this week by Schneiderman, alleging that ... Read More

Regulators Signal Exceptions for Community Banks

Portfolio lending by community banks could be treated differently than other types of lending under pending Basel III capital requirements, according to recent indications from federal regulators. The potential exceptions for community banks follow strong lobbying from lenders as well as bipartisan support in Congress. “While we strongly believe that finalizing the regulations is critically important for certainty and planning, we also believe there are merits to considering alternative, simpler approaches to ... Read More

Underwater Non-Agency Loans Receive Reductions

A whopping 75.0 percent of eligible non-agency borrowers entering the Home Affordable Modification Program in September received principal reduction with their loan modification, according to the Treasury Department. The increased activity was prompted by higher incentive payments along with the $25.0 billion national servicing settlement, according to Treasury officials. Borrowers who meet general HAMP requirements and have a loan-to-value ratio greater than 115 percent are eligible for principal reduction ... Read More

Servicers on Track to Meet Settlement Obligations

The five banks participating in the $25.0 billion national servicing settlement are on track to meet their obligations under the settlement – some two years ahead of the 2015 deadline – according to a report this week from the settlement’s monitor. Loss mitigation activity is focused on portfolio loans, though Bank of America has completed significant principal forgiveness on mortgages in non-agency mortgage-backed securities. The settlement requires $19.11 billion in consumer relief, and the participating servicers ... Read More

Servicers Increase Focus on Reverse Mortgages

Ocwen Financial’s agreement in October to purchase reverse mortgage lender Genworth Financial Home Equity Access was the latest in an effort by special servicers to diversify their portfolios with reverse mortgages. Nationstar Mortgage burst onto the scene at the beginning of the year to become the largest reverse mortgage servicer and Walter Investment Management recently purchased Reverse Mortgage Solutions. Servicing reverse mortgages is much different than dealing with the ... Read More

Wells Fargo the Top Rate-Spread Lender in 2011

Wells Fargo originated the most rate-spread loans in 2011, according to an analysis by affiliated publication Inside Mortgage Finance of Home Mortgage Disclosure Act data compiled by ComplianceTech/Lending Patterns. The loans, also known as higher priced mortgages, are federal regulators’ proxy for subprime mortgages. Wells had $1.73 billion in rate-spread originations in 2011, accounting for 6.0 percent of such originations. While a number of lenders focused almost exclusively ... [Includes two data charts] Read More

News Briefs

The Consumer Financial Protection Bureau announced this week that the implementation date for certain mortgage disclosures will be delayed beyond Jan. 21 to allow for coordination with the pending integrated Real Estate Settlement Procedures Act and Truth in Lending Act disclosures. Chimera Investment announced last week that it will miss reporting deadlines for its quarterly report for the third quarter of 2012. The real estate investment trust said the report required by the ... [Includes two briefs] Read More

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