New Mortgage Plan Questioned At ABS East
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18 October 2011
Securitization Intelligence
Amelia Granger
A new mortgage plan being kicked around between big banks and regulators left ABS East attendees with plenty of questions. A mortgage strategist speaking with SI said his initial concern was whether a plan on the state-level would square with coming national changes to the Home Affordable Refinancing Plan. "They would need to be coordinated," he said. Changes to HARP have been promised from the Obama administration to try and reach more underwater borrowers.
The question was raised in a morning panel with investors. Yuri Kudinov, director of structured finance and mortgage-backed securities at TIAA-CREF, said the shadow inventory of homes in limbo is a huge cloud hanging over the industry. But he said once the shadow inventory is dealt with, through loan refinancings or other measures, the result will be a bigger RMBS market and interest from new investors. Panelist Dapeng Hu, managing director at BlackRock, said the tangled web of regulation and the big changes on the horizon have the market in a bind. "All the political uncertainties will be a big factor in the future of securitization," Hu said.
Details of the plan were scant in news reports. It appears that major banks negotiating with state attorneys general over improper foreclosure settlements are now putting refinancing assistance on the table. "Could this reach underwater borrowers beyond the scope of HARP?" the strategist speaking with SI asked. "Also, changes to HARP may just reach Fannie Mae and Freddie Mac borrowers. Would this new plan reach private-label borrowers?"
Another market official speaking with SI heard all he needed to hear. "Sounds like socialism to me," he joked. |
