Tag Archives: Subprime Loans

Could increasing non-QM issuance indicate another crash is on the horizon? Are non-QM loans the new subprime? Research released today may have the answer everyone is looking for.

The SEC sued six former GSE executives in 2011 over subprime mortgage fraud. The other five have all reached settlements; why is Mudd taking his case all the way to trial?

Loss severities on loans serviced by banks were reported to be more than 10 percent higher than loss severities on non-bank serviced loans in those three states, which accounted for 42 percent of all subprime loans in foreclosure in private-label residential mortgage-backed securities.

The researchers discovered that mortgage loans with a CDS were much more likely to default than those without a CDS, because banks often allowed the riskiest subprime loans to be packaged into securities with CDS coverage.

Also under the terms of the settlement, there was no disgorgement, civil penalty, or admission of wrongdoing on the part of any of the parties, according to a press release from Zuckerman Spaeder, the firm that represented defendant Patricia Cook.

Investment firm Morgan Stanley is currently negotiating a possible settlement with the office of New York Attorney General Eric Schneiderman over the mishandling of subprime mortgage loans in the run-up to the housing market crash and financial crisis, according to multiple media reports.

According to Fitch Ratings' latest quarterly index, prepayment rates among U.S. residential mortgage-backed securities (RMBS) have declined to the lowest levels of the post-crisis era. Fitch Ratings' director Sean Nelson attributed the decline in prepayment rates to higher interest rates and fewer distressed liquidations.