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Secondary Market

Fannie Mae Adopts New Rules for Pre-Mod Income Verification

A general practice of servicers today is to consider borrowers for a standard Fannie Mae mortgage modification based solely on the homeowners' verbal statement of their financial information. But that's about to change. The GSE has issued new servicing guidelines stating that effective July 15, 2010, all servicers must verify the borrower's income, liabilities, and monthly expenses to determine that a financial hardship does exist, before a loan modification can be offered.

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Freddie Mac’s Mortgage Holdings Shrink, Delinquencies Remain Flat

Mortgage giant Freddie Mae reduced the size of its mortgage portfolio in May, while the delinquency rate of single-family home loans it guarantees stood unchanged from the previous month. According to the GSE's monthly summary report, its total mortgage portfolio decreased at an annualized rate of 4 percent last month. The drop can be largely attributed to the company's purchases of home loans it had sold to investors that were 120 or more days past due.

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Ginnie Mae Guarantees More than $33.9 Billion in MBS in May

The Government National Mortgage Association (Ginnie Mae) recently released its issuance numbers for May, showing that it guaranteed more than $33.9 billion in mortgage-backed securities (MBS) during the month. In addition to reporting on its continued provision of liquidity to the secondary market, the corporation announced that in April, 1.79 percent of the single-family loans in Ginnie Mae guaranteed securities were 90 days or more delinquent, down from 1.85 percent in March 2010.

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New Study Shows Mortgage Litigation Has Risen to All-Time High

Legal actions tied to foreclosures and investor-related cases have surged. An industry study released this week shows that the Mortgage Litigation Index prepared by the Washington, D.C.-based firm Patton Boggs LLP hit an all-time high during the first quarter of this year. Active cases during the three-month period totaled 155, according to the report. It was the highest reading since the index was launched in 2007. Criminal cases more than doubled and mortgage insurance emerged as an area of growing litigation.

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Report: 1.7 Million GSE Loans at Least 60 Days Past Due

The number of loans held by Fannie Mae and Freddie Mac that were 60-plus-days delinquent stood at 1.7 million at the end of the first quarter of 2010, the companies' conservator said in a report to Congress this week. While the volume of past dues may seem colossal, FHFA says the figure actually represents a 1.3 percent decrease - the first decline in two years. The agency says servicers are working through the glut of GSE delinquencies at a much faster pace, too, with foreclosure prevention actions up 75 percent in Q1.

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Manhattan’s Stuy Town Heading to Foreclosure Auction

Four months after Bank of America and its special loan servicer CWCapital Asset Management sought to foreclose on Manhattan's largest apartment complex, a New York federal judge has given them the green light to move forward with a foreclosure sale. The owners of Stuyvesant Town and Peter Cooper Village defaulted on $3 billion in senior mortgage bonds earlier this year in an attempt to force CWCapital to restructure the debt -- a move that backfired. The judge ruled that the amount owed has grown to $3.67 billion. The complex is currently estimated to be worth $1.9 billion.

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Amherst Expands to Commercial with Industry Veteran as Lead Trader

Amherst Securities Group has been analyzing and trading residential mortgage-backed securities (RMBS) for the past 15 years. And now, the company is adding commercial mortgages to its roster. Amherst announced Monday that John Caputo has joined the company as its primary commercial mortgage-backed securities (CMBS) trader. He brings nearly 20 years of commercial real estate expertise to the position.

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Commercial Property Prices Post 1.7% Gain in April: Moody’s

Commercial real estate prices in the U.S. rose 1.7 percent in April, according to data released Monday by Moody's Investors Service -- the first monthly increase since January. Moody's says commercial property prices nationwide are currently 41.1 percent below their peak in October 2007. Separate commentary released by the investment firm Pimco warns that as over $500 billion in over-leveraged commercial real estate slowly reach the market, prices will remain 30 percent to 40 percent below the 2007 peak for at least three years.

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Lenders Reclaim $10 Billion of Commercial Property: Report

Distressed commercial real estate is being reclaimed by lenders at a rapid pace, but relatively few assets are being marketed and re-sold. According to the research firm Real Capital Analytics, lenders acquired some $10 billion of commercial property during the first five months of this year -- via foreclosure or negotiated settlement. But they disposed of just $2.6 billion of commercial REO during the same period, even though there is a large amount of ready capital eager to acquire these assets.

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