Subprime
By Krista Franks | 01/23/2012
As robo-signing reviews reach completion, servicers are beginning to work through some of their foreclosure backlogs, according to a third-quarter report from Moody's Investors Service. At the same time, the ratings agency found that loan modifications are on the decline. Servicers are now turning to loss mitigation alternatives such as short sales and deeds in lieu, Moody's says. The agency is also forecasting longer timelines this year to move properties from foreclosure sale to REO liquidation.
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By Carrie Bay | 12/23/2011
Sen. Scott Brown of Massachusetts says the civil lawsuit filed by the Securities and Exchange Commission (SEC) last week against six former executives of Fannie Mae and Freddie Mac "does not go nearly far enough." Brown is pressing the Department of Justice and the SEC to immediately open criminal investigations into Fannie and Freddie. The senator says authorities need to take a closer look at the GSEs' business dealings prior to the housing collapse and their disclosure of subprime mortgage holdings.
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By Krista Franks | 12/21/2011
The Justice Department announced Wednesday a $335 million agreement to settle allegations against Countrywide of discriminatory lending from 2004 to 2008. This settlement is the largest the department has ever reached regarding fair lending. Countrywide allegedly discriminated against 200,000 minority borrowers by charging them higher interest rates than white borrowers with matching creditworthiness and financial status. The money will go to those borrowers harmed by Countrywide's practices.
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By Krista Franks | 12/20/2011
At the height of the financial crisis in 2008, Fannie Mae and Freddie Mac held $2 trillion in high-risk subprime loans, amounting to 42 percent of their single-family portfolios, according to Edward Pinto of the American Enterprise Institute. Pinto, who served as chief credit officer for Fannie Mae until the late 1980s, arrived at this number by relying on data from the Securities and Exchange Commission (SEC), which filed a lawsuit against six former GSE executives for fraud.
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By Krista Franks | 12/16/2011
Six former executives at Fannie Mae and Freddie Mac are now facing securities fraud charges for making misleading statements about the companies' holdings of subprime loans between March 2007 and August 2008. The Securities and Exchange Commission (SEC) alleges they fed the markets false information about the amount of risk on each company's books. Both GSEs entered into non-prosecution agreements with the SEC and have agreed to cooperate in the litigation against their former executives.
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By Carrie Bay | 12/05/2011
The foreclosure crisis has had a long and destructive run - five years and counting, with millions put out of their homes.
According to the Center for Responsible Lending (CRL), we're not even halfway through the devastation. The organization's analysis of 27 million mortgage loans originated over a five-year period found that 6.4 percent of mortgages made between 2004 and 2008 have ended in foreclosure, and an additional 8.3 percent are at immediate, serious risk.
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By Carrie Bay | 11/14/2011
Ocwen Financial continues to make moves to expand its portfolio. The special servicer disclosed in a filing with the Securities and Exchange Commission that it has agreed to purchase $15 billion in mortgage servicing rights from JPMorgan Chase. It's the latest in a string of transactions bolstering Ocwen's portfolio, and the company's not stopping there. Ocwen says a new venture will allow it to compete for the servicing rights of newly originated FHA loans. It is also looking to expand into reverse mortgages and home equity lines of credit.
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By Carrie Bay | 11/04/2011
Private investors in residential mortgage-backed securities (RMBS) comprised of jumbo mortgage loans are dealing with a greater risk of strategic defaults, according to Moody's Investors Service. The company's analysts base this assumption on the fact that jumbo RMBS have large populations of current borrowers with high loan-to-value (LTV) ratios. In contrast, the subprime sector faces the lowest potential for future performance deterioration because its weaker borrowers are already delinquent or have defaulted.
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By Carrie Bay | 11/01/2011
Mortgage servicing practices have a considerable impact on the performance of a portfolio, and according to Moody's Investors Service, risk composition is diverging based on how individual servicers are dealing with borrowers. The ratings agency has begun publishing comparative performance metrics on the largest servicers of private residential mortgage-backed securities (RMBS). Its analysts have identified three whose "strong servicing practices" have improved delinquency trends: GMAC, Ocwen, and Wells Fargo.
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By Krista Franks | 10/17/2011
Amid a challenging environment for servicers, CitiMortgage, GMAC, and Ocwen have outperformed major competitors with regards to loss mitigation and foreclosure timelines, according to a recent report from Moody's Investors Service. The company's Servicer Dashboard rates major servicers on their performance from June 2010 to June 2011. Moody's notes that Bank of America's and Chase's performance assessments were affected by large servicing acquisitions and foreclosure moratoria.
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