Residential mortgage subprime loans in foreclosure serviced by banks experienced higher losses than loans serviced by non-bank firms in the top three foreclosure states over the last 12 months, according to a report from Moody’s Investor Service. The report compared loan loss severities for both banks and non-bank entities in Florida, New York, and New Jersey for the past year. 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.
Florida, New York, and New Jersey accounted for 42 percent of all subprime loans in foreclosure in private-label residential mortgage-backed securities. Loans serviced by banks have longer foreclosure timelines, which increase expenses to the RMBS trusts that hold the loans, therefore causing higher losses on those loans. Those expenses include principal and interest advances on delinquent loans, tax and insurance payments, attorney fees, and property maintenance costs.
HUD Secretary Julián Castro, whose name has been bantered for months as a possible vice presidential candidate, plans to announce his endorsement for former U.S. Secretary of State and Democratic presidential hopeful Hillary Clinton on Thursday. Castro, 41, has been HUD Secretary since July 2014. Prior to becoming the country’s top housing official, Castro served as mayor of San Antonio from 2009 to 2014.