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IO Extravaganza.(interest-only loans)
We've had warnings about a real estate slowdown, most recently from outgoing Federal Reserve Board chairman Alan Greenspan. But what mortgage servicers really should focus on is one corollary to rising home prices in high-cost markets: the interest-only loan phenomena.
Recent data compiled by MSN affiliate, the Quarterly Data Report, show that interest-only loans accounted for 26% of loan production in the second quarter. That's a startling number, and it has ramifications for the servicing segment of the mortgage business.
Rating agencies have sounded a note of caution about this market, asserting that there is too little performance history in the IO market for anyone to fully understand how these loans will perform over time. What we do know is that delinquency and default rates on IO loans are likely to be much, much higher than on plain vanilla, 15-year and 30-year, fixed-rate, fully amortizing loans.
Despite the popularity of more conservative loans in years past, it is easy to see how demand for IO loans has grown. For many homebuyers today, keeping the monthly mortgage payment as low as possible is the only way they can afford to get into the house they want, especially in high-cost markets. But if house prices fall, and some think they will ...
- Booming IO Market Sparks Concern.
- Magazine article from: Mortgage Servicing News Muolo, Paul Collins, Brian July 1, 2005 700+ words
...Hence, the name interest-only mortgages. According to Mortgage Servicing News, and its affiliate the Alternative Products QDR...business," said company spokesman Alfred King. (c) 2005 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http...
- 40-year offering to eat away' at IO market share.(interest-only)(surveys on...
- Newspaper article from: Asset Securitization Report Pyburn, Allison February 20, 2006 700+ words
...required credit enhancement on the 40-year product, among other factors, is expected to allow the product to eat away at IO market share in the subprime arena. A number of issuers, including New Century Financial Corp., have decreased their interest...
- MBS market floored by fast prepayment reports; refinancings can now be...
- Newspaper article from: Asset Securitization Report Data, Adam Tempkin Ifr Mortgage February 12, 2001 700+ words
...trader who saw Ginnie 8s and 8.5s trail by three and six basis points, respectively. Meanwhile, the interest-only (IO) market was down three-quarters of a point as a result of the prematurely fast speeds. Near close last Wednesday, when the prepayment...
- IO Market Zooms to 21% Share.
- Magazine article from: National Mortgage News Muolo, Paul Collins, Brian June 6, 2005 700+ words
WASHINGTON -- Two years ago, very few residential lenders were funding interest-only mortgages, but today these somewhat controversial loans account for 21% of the entire production market in the U.S., according to exclusive survey figures compiled by this newspaper. In the first quarter, the
- Freddie Joins Fannie in IO Market.
- News wire article from: Mortgage Line Sichelman, Lew June 15, 2004 700+ words
Freddie Mac is joining the IO bandwagon. Beginning July 1, the big secondary market institution will purchase and securitize an entire suite of interest-only loans, including several ARM options and a pair of fixed-rate mortgages. Announced at the Mortgage Bankers Association's National Secondary
- Loan Serves a Need in the IO Market.(American Brokers Conduit of Melville...
- Magazine article from: Origination News Dymi, Amilda August 1, 2006 700+ words
Well-designed adjust-able-rate loan options help offer loan security and flexibility that serve diverse market needs and continued business growth were at least part of the reason why executives from mortgage real estate investment trust American Brokers Conduit of Melville, N.Y., have launched one
- Loan Serves a Need in the IO Market.
- News wire article from: Mortgage Line Dymi, Amilda August 16, 2006 700+ words
Well-designed adjust-able-rate loan options help offer loan security and flexibility that serve diverse market needs and continued business growth were at least part of the reason why executives from mortgage real estate investment trust American Brokers Conduit of Melville, N.Y., have launched one
- Accounting for mortgage servicing rights.
- Magazine article from: The National Public Accountant Reynolds, Brian M. September 1, 1995 700+ words
...s SFAS No. 122, Accounting for Mortgage Servicing Rights, amending SFAS No. 65...reconsider the accounting treatment of mortgage servicing rights. The MBAA wanted the FASB...the accounting distinction between mortgage servicing rights chat are acquired through...
