The Treasury Department's "teaser freezer" plan to help subprime borrowers facing resets will have a "limited" impact on the total number of loan modifications and the coming wave of foreclosures, according to some Wall Street analysts.Reports by UBS and Friedman Billings Ramsey & Co. point out that the group of homeowners targeted for modifications -- where the servicer freezes the interest rate at the starter (or "teaser") rate -- would likely get their loans modified without a government-sponsored plan. "That is why we suspect this effort will have only marginal impact on total modifications and little impact on the coming wave of foreclosures," said Thomas Zimmerman, a managing director at UBS Investment Bank. FBR analyst Paul Miller contends that the teaser freezer plan simply represents what is already being done in the market. "In our opinion, the plan will affect a limited number of borrowers, many of whom might receive a loan modification even without a government-sponsored plan," Mr. Miller says. "The plan will not enable borrowers who are unable to pay their mortgages to keep their homes or support home prices."
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The massive mortgage business saw a first quarter profit mitigated by nearly $300 million in hedging losses.
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The Consumer Financial Protection Bureau has seen excessive property-inspection charges, fees that loan mods should eliminate and improper line-item labels.
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Michael Tannenbaum, whose experience in the financial services industry spans over 15 years, has a track record of helping companies scale and grow.
April 24 -
A majority of consumers earning more than $100,000 annually said they were concerned about their own ability to purchase a home, demonstrating how affordability issues are impacting those at many socioeconomic levels, the University of Michigan study found.
April 24 -
The nonbank's results add to other indications that the first quarter's "higher for longer" rate scenario had an upside for efficient servicing operations.
April 24 -
The latest rate increases contributed to a 1% drop in purchases from the previous week and 15% annually, according to the Mortgage Bankers Association.
April 24