The default rate on subprime mortgage loan rose 19 basis points in the month of March to 11.44%, the highest level in nearly 10 years, according to a Friedman Billings Ramsey report.Defaults on securitized subprime loans have risen from 6.52% in March 2006. In November, defaults surged by 101 bps to 10.1%. Since November, the default rate has risen by 136 bps. Researchers at the investment banking firm based in Arlington, Va., also reported that the default rate on alt-A loans rose to 2.26% in March from 0.90% in March of the previous year. The alt-A default rate is the highest since January 2004. (Default rates include loans that are 90 days or more past due, in foreclosure and real estate owned.)
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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.
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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.
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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.
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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