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Secondary Market

Adjustable-Rate Mortgages Losing Ground

Few borrowers are asking lenders for adjustable-rate mortgages (ARMs) these days, what with all the bad publicity paid to ARM resets in the face of soaring foreclosures and borrowing costs for fixed mortgages now sitting at record lows. An annual report on the ARM market published by Freddie Mac Tuesday shows adjustable-rate mortgages accounted for just 3 percent of all conventional home purchase loans in 2009. That's the smallest piece of the pie for ARMs since at least 1982. At that time, they made up 62 percent of all new mortgages.

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Ambac Brings MBS Suit Against Credit Suisse

Ambac Assurance Corp., a business unit of bond insurer Ambac Financial Group Inc., has sued Credit Suisse Securities and its affiliate DLJ Mortgage Capital over mortgage-backed securities (MBS) Ambac insured in 2007. Ambac alleges the two investment companies hid information about the borrowers' ability to repay their loans, resulting in high default claims.

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PMI Forecast Puts Long-Term Rates at 6% by Year-End

Mortgage interest rates for 30-year fixed loans are projected to hit 6.00 percent by the end of 2010, according to the latest housing and mortgage market outlook from the PMI Group. Long-term interest rates have generally headed higher since the end of November, and PMI expects this trend to continue, with a notable increase coming in Q2 when the Federal Reserve withdraws from the secondary mortgage market.

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Banks to Prepay FDIC Fees, Agency Mulls ‘Safe Harbor’ for Securitized Loans

It's no longer just a proposal the FDIC decided Thursday to implement a new payment structure for banks that requires them to prepay three years of insurance premiums. The agency also signaled that it is putting together new rules that would provide ""safe harbor"" protection for loans bundled in securities, essentially putting these assets out of the FDIC's reach if the selling institution goes under.

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