In yesterday’s blog we mentioned ‘rumors’ about certain banks that were quietly originating or buying nonprime mortgages from primary lenders. We talked to one private nonprime executive this morning who confirmed to National Mortgage News, that he’s sold a handful of pools over the past 18 months. The buyers were all depositories. The banks are located in these states: Colorado, Michigan, and Texas. (Not all the sales went smoothly.) In the weeks ahead we’ll be exploring details further. But if you’re hoping for a huge revival in nonprime lending it won’t happen anytime soon. The ‘private label’ market that could be re-emerging likely will be small. Private equity capital is still too scared to touch the nontraditional mortgage space. But at least there’s smoke. And when you see smoke, fire may not be too far behind.
