Tag Archives: Credit Risk

While rising home prices have lifted many underwater homeowners to positions of positive equity, the real estate information and analytics provider DataQuick warns tight credit will still preclude many traditional buyers from the market. Instead, investors will continue to carry an outsized portion of the purchase market for the foreseeable future, according to DataQuick.

""Modest to moderate"" economic growth continues to be the theme at the Federal Reserve, which this week released its Beige Book, tracking expansion across the 12 Fed districts from October through mid-November. The central bank reported improvements in residential real estate activity in the Boston, Philadelphia, Chicago, St. Louis, Minneapolis, and San Francisco regions, with single-family home sales softening in most of the remaining districts.

It's no secret underwriting standards have tightened in recent years, and while many decry the heightened standards for making homeownership less accessible to some Americans, an economist with CoreLogic points out in a report released Wednesday that heightened standards are, without question, impacting delinquencies for the better, with 2013 vintage loans carrying a serious delinquency rate of just six basis points.

In an effort to mitigate potential losses incurred by a questionable pool of single-family loans, Freddie Mac announced Tuesday that it has obtained an insurance policy underwritten by Arch Reinsurance Ltd. The policy will cover up to $77.4 million of credit losses for a portion of the credit risk associated with a pool of single-family loans funded in the third quarter of 2012. The move is in line with the GSE's goal of sharing credit risk with the private market.

Both Fannie Mae and Freddie Mac continue to see strong profits as the housing market improves. With the release of their third-quarter results the GSEs announced they will be making substantial payments to the U.S. Treasury in December--$8.6 billion from Fannie Mae and $30.4 billion from Freddie Mac. Together, the two companies will have paid back about $185 billion to taxpayers as of December, nearly equaling the $188 billion in bailout money provided to the two mortgage financiers.

Delinquency and foreclosure data reveals the housing market is heading back to pre-crisis norms, according to the Mortgage Bankers Association's latest National Delinquency Survey. The percentage of home loans in delinquency or foreclosure was 9.75 percent as of the third quarter, the lowest level in about five years, according to the trade group's report. Likewise, foreclosure starts, at just 0.6 percent, are approaching pre-crisis levels.

Freddie Mac has priced a $630 million offering of Structured Agency Credit Risk (STACR) debt notes, marking the second STACR offering in which private sources--not taxpayers--take on the credit risk. According to a statement from the GSE, about 50 broadly-diversified investors participated in the offering for the debt notes, which are scheduled to settle November 12.

Borrowers' financial health deteriorated in the third quarter after seeing marked improvement in the previous three-month period, according to recent findings released by the online exchange LendingTree. The company's measurement of borrower health is based on average loan-to-value (LTV) ratios and average credit scores, and with rising home prices, potential borrowers faced more financial pressure.

CoreLogic Credco's Instant Merge credit reports are now available on D H Mortgagebot's EnterpriseLOS platform, CoreLogic announced. Instant Merge provides creditors with information such as demographic specifics and detailed creditor contact info.

While many in the industry laud the recent changes the Consumer Financial Protection Bureau (CFPB) made to the proposed Qualified Residential Mortgage (QRM) rule, one economist says the new proposed rule sets the stage for another housing crisis.