On Thursday morning Morgan Stanley will hold a public auction of $2.48 billion in mortgages originated by ailing subprime giant New Century Financial Corp.A source familiar with the matter said Morgan believes it has the legal right to the loans because NCFC is in default on its warehouse covenants. (Morgan is one of several warehouse lenders that recently informed NCFC that they no longer will fund its production.) Morgan is auctioning off the loans "as is" with no representations and warranties. Morgan had originally committed $2.5 billion in warehouse lines to NCFC. The source said Morgan is holding a "clean auction" in order to establish a value for the mortgages in anticipation of a "pre-packaged" bankruptcy sale of NCFC. Late last week NCFC said it will realize a $46 million loss on a deal struck with Barclays Bank PLC to settle $900 million in buyback/financing claims. NCFC, which is no longer funding loans, has been delisted by the New York Stock Exchange. It is the subject of criminal and civil investigations.
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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