Panelist: Nonprime Going Mainstream

In the wake of the prime lending sector's refinance contraction, the nonprime sector has picked up and become more mainstream, accounting for 28% of total loan originations, according to a panel member at the Mortgage Bankers Association's National Mortgage Servicing Conference and Expo in Phoenix.Rick Glass, managing partner with R.T. Glass & Associates, made the comments at a panel called "Repositioning Non-Prime Servicing," where he and other sector executives shared their thoughts on key challenges and competitive strategies in this market. Michael Drawdy, senior vice president at Countrywide Financial Corp., said half of subprime ARMs will be due in the summer and over the next 14 months. "There will be some people who can't pay for an ARM change," Mr. Drawdy said. "That is why you must make sure there is a system in place for collections -- to make sure borrowers know their options." Panelists talked about repayment plans and ARM modifications aimed at helping borrowers stay in their homes. Over the next 12-24 months, there is a potential for severe delinquencies, they said.