Tag Archives: Jumbo Loans

As robo-signing reviews reach completion, servicers are beginning to work through some of their foreclosure backlogs, according to a third-quarter report from Moody's Investors Service. At the same time, the ratings agency found that loan modifications are on the decline. Servicers are now turning to loss mitigation alternatives such as short sales and deeds in lieu, Moody's says. The agency is also forecasting longer timelines this year to move properties from foreclosure sale to REO liquidation.

Private investors in residential mortgage-backed securities (RMBS) comprised of jumbo mortgage loans are dealing with a greater risk of strategic defaults, according to Moody's Investors Service. The company's analysts base this assumption on the fact that jumbo RMBS have large populations of current borrowers with high loan-to-value (LTV) ratios. In contrast, the subprime sector faces the lowest potential for future performance deterioration because its weaker borrowers are already delinquent or have defaulted.

Amid a challenging environment for servicers, CitiMortgage, GMAC, and Ocwen have outperformed major competitors with regards to loss mitigation and foreclosure timelines, according to a recent report from Moody's Investors Service. The company's Servicer Dashboard rates major servicers on their performance from June 2010 to June 2011. Moody's notes that Bank of America's and Chase's performance assessments were affected by large servicing acquisitions and foreclosure moratoria.

Congressman Gary Ackerman of New York has sent a letter to House Appropriators urging them to extend the temporarily increased conforming loan limit that will otherwise expire October 1. Ackerman was joined by 36 members of Congress in his request. He suggested the conforming loan limit extension be built into the continuing resolution that will keep the federal government functioning when the new fiscal year begins next month. Private investors, though, are advocating for the loan limit increase to expire.

Home sales are expected to outpace 2010 sales by 3 to 5 percent for the remainder of 2011 as the housing market follows the overall economy, according to Freddie Mac. The GSE's latest outlook, released Monday, suggests the housing market is not likely to see a full ""double dip."" According to the report, June's disappointing jobs report likely reflects a temporary ""soft patch"" in the economy rather than an inflection point in economic growth. Freddie's economists expect housing to shadow GDP forecasts and improve over the balance of 2011.

Despite a decline in California home sales last year, the number of homes sold in the Golden State for $1 million or more in 2010 rose for the first time since 2005, according to a study from San Diego-based DataQuick Information Systems. Million-dollar sales peaked in 2005 at 54,773 and then declined each year through 2009. In 2010, 22,529 homes sold for $1 million or more in California, a 21 percent increase from 18,621 in 2009. The most expensive confirmed purchase last year was a Bel Air residence for $50 million.

Bank of Internet USA, a nationwide savings bank operating primarily via the Internet, is now a preferred investor of Lenders One Mortgage Cooperative, a national alliance of community mortgage bankers, correspondent lenders, and suppliers of mortgage products and services. According to Lenders One, the partnership offers several advantages to its members, including special pricing and access to customized portfolio jumbo and super jumbo loan products.

As the backlog of foreclosures continues to drive down housing prices, losses on private-label residential mortgage backed securities (RMBS) will increase in 2011, according to Moody's. The forecast for more red ink seeping from home loans sold to investors comes despite the fact that the agency believes the rate at which loans become delinquent will decline during the year. Moody's expects flaws in foreclosure practices that have recently come to light to delay foreclosures by three to six months, further extending the window of losses for investors.

The jumbo market is seeing significant improvement in interest rates and market liquidity, according to Total Mortgage Services, LLC in Connecticut. The lender and broker is now offering 30-year fixed jumbo mortgages up to $729,000 at a rate of 4.875 percent. This considerable drop in rates has increased the number of purchase and refinance transactions for Total Mortgage Services.