The performance of adjustable-rate subprime mortgages originated in 2006 is rapidly deteriorating and "higher default and loss rates may ensue," according to researchers at Friedman, Billings, Ramsey & Co.The default rate on 2006 subprime ARMs jumped 27% in November to 3.21% while the default rate on loans originated in 2005 hit 6.49%. The FBR researchers noted that the 2006 vintage has a higher interest rate (8.20%) than 2005 loans (7.36%), which implies that 2006 borrowers have higher debt service burdens. "It appears that subprime lenders may have mended their tattered profitability in 2006 by originating loans with higher mortgage rates, perhaps to riskier borrowers," the FBR report says. Based on preliminary volume data, the Arlington, Va.-based investment banking firm is reporting that issuance of non-agency subprime MBS fell 12.3% in 2006 to $521.3 billion, down from $594.4 billion in the previous year. However, alternative-A MBS issuance jumped 12.5% to $299.9 billion.
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The lender recorded a $59 million net loss in the fourth quarter, an 83% improvement from its third quarter performance.
March 28 -
Initial analyses of Home Mortgage Disclosure Act data show UWM ahead in 2023 loan numbers and dollar volume, but Rocket's market share still looks competitive.
March 28 -
Last year, the Raleigh, N.C.-based Integrated called off a deal to sell itself to MVB Financial after bank stocks took a hit in the aftermath of the regional bank failures. Capital hopes to expand its government-guaranteed lending with the transaction.
March 28 -
The pending end of the program comes as over half of U.S. states have already ceased accepting new applicants for federal aid aimed to help struggling households with mortgage payments.
March 28 -
But the 30-year fixed rate mortgage is still near 7%, and that remains the overhang on the housing market, Freddie Mac said.
March 28 -
Mortgage payments rose 10% year-over-year to an all-time high for March, Redfin said.
March 28