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Inside Nonconforming Markets

September 16, 2005

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Interest-Only Loan Market Shows Solid Growth

Despite warnings about their potential risks, mortgage borrowers don’t seem to have lost their appetite for interest-only mortgages. In fact, a new analysis reveals that IO loans currently account for a significant slice – nearly one-quarter – of the mortgage market pie. Inside Alternative Mortgages estimates that $317 billion in new interest-only loans, excluding option ARMs, were originated during the first half of the year – an amount equal to 22.2 percent of the… [One data table included] Read More

Watch Operational Risk on Alt Loans, Fitch Warns

Securitzers of alternative mortgages take heed – your current risk management policies may not be up to the challenges presented by a new breed of adjustable-rate and low documentation loans, rating agency Fitch has warned. “Because there is no history for most of these offerings, it becomes more difficult to predict performance,” Fitch said in a Sept. 7 report on the operational risks associated with non-traditional mortgages. … Read More

For the Beleaguered MH Market, More of the Same

Hopes for a renaissance in the manufactured housing market appear to have waned – at least for now – as lenders continue to fight a losing battle against a number of market forces, including the rise of subprime lending. That was the word at this week’s ABS East Conference in Boca Raton, FL, where participants heard talk of a sluggish market where sagging demand has made profits hard to come by. “It’s a tough business… Read More

Non-Trad Lenders to Get Guidance from Feds

Growing regulatory concerns over so-called exotic or specialty mortgages have prompted federal regulators to draft new guidelines for lenders that specialize in such nonprime products. Federal regulators at a compliance conference hosted by the Mortgage Bankers Association in Washington, DC, last week said a set of guidelines focusing on loans with interest-only features and option ARMs is in the works and will be released in six to eight weeks. … Read More

Homebridge Offers Borrowers What They Want

Borrowers are becoming savvier when it comes to alternative mortgages. At least, that’s been the experience of Homebridge Mortgage. “A larger and larger percentage of borrowers who seek us out already have in mind a type of amortization schedule – and a type of mortgage product – that they feel is what they want,” said Paul Levine, chief operating officer for the New York-based mortgage bank. “There has definitely been a change in the share… Read More

Subprime Players Experiment With Alt A Loans

Two major subprime lenders have waded into the Alt A market with new programs. But neither Accredited Home Lenders nor Option One Mortgage is planning to make a big splash in the market. At this week’s ABS East Conference in Boca Raton, FL, sponsored by the Information Management Network, Accredited Executive Vice President Stuart Marvin said that the company has begun originating Alt A loans under the name of Axiom Financial Services. … Read More

Countrywide Leads Steady Jumbo Market

The prime jumbo mortgage market has exported a number of its innovations – such as streamlined documentation and interest only payment plans – to the broader home loan business. But rising house prices, strong sales and steady interest rates have helped the jumbo sector maintain its role in a rapidly changing mortgage market. … [One data table included] Read More

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