Mortgage Debt & Home Equity

Fast Foreclosures, Slow Foreclosures

04/07/15

At the onset of the current foreclosure crisis, banks bemoaned their inability to get homeowners in default to respond to their generous offers of loan modifications and other foreclosure alternatives. Homeowners, it seemed, were like ostriches with their heads in the sand. Outreach efforts were launched to bring the homeowners in from the cold. Foreclosure sales, banks told us, were the worst possible outcome, and everything should be done to avoid them.

[more]

Foreclosure Crisis Update

03/28/15

Is the foreclosure crisis over? Yes and no. Since 2007, about six million homes have been sold at foreclosure sales (Foreclosures Public Data Summary Jan 2015). Today, about one million homes are still somewhere in the foreclosure process.

[more]

Community Banks and the CFPB

03/16/15

I'm testifying before the House Financial Services Committee on Wednesday at a hearing entitled "Preserving Consumer Choice and Financial Independence." I'm the only non-industry witness (no surprise there).

[more]

Credit Slips Bloggers' Amicus Briefs in Caulkett

03/05/15

With my attention drawn to other matters, my personal blogging has been light for the past month. One of the things that had my attention was the Caulkett case currently pending before the Supreme Court. The issue in Caulkett is whether a wholly underwater second mortgage can be avoided in a chapter 7 bankruptcy. Without any value to reach, a wholly underwater second would not seem to be an allowed secured claim within the meaning of section 506.

[more]

Servicing Matters

03/03/15

I am so pleased to offer the following post by Carolina Reid, a premier housing researcher at UC Berkeley, about her excellent study of how mortgage servicers matter in creating home-saving opportunities. Welcome Carolina to Credit Slips.

[more]

A 21st Century Trust Indenture Act?

02/17/15

MBS investors suffered a serious legal blow a couple of months back when the Second Circuit held that the Trust Indenture Act of 1939 doesn't apply to MBS

[more]

Sh*t In, Sh*t Out? the Problem of Mortgage Data Corruption & Empirical Analysis

02/09/15

Empirical economic analysis is a powerful tool.  It can elucidate correlations and sometimes even get us to causual explanations. But it has a serious weak-spot:  its value is entirely dependent upon the integrity of the data analyzed. To put the problem succinctly: sh*t in, sh*t out. 

[more]

The Disappearance of HOEPA Loans

02/02/15

While I'm on the subject of dead markets, what about HOEPA loans?  HOEPA loans are super-high-cost loans that qualify for special consumer protections under the Home Owners Equity Protection Act of 1998. (Yes, that's the one that directed that the Fed "shall" implement a rule on abusive lending, which the Fed understood to be discretionary until 2008.)  

[more]

Just How Dead Is the Private-Label MBS Market?

02/02/15

Pretty darn dead.  In 2014, there were all of 22 private-label RMBS deals.  These deals provided $5.67 billion in financing for 7,342 mortgages.  Let that sink in for a second.  The private-label market financed fewer home mortgages than were made in the District of Columbia last year.  

[more]

Second-Liens and the Leverage Option

01/28/15

Susan Wachter and I have a new (short!) paper up on SSRN. It's called Second-Liens and the Leverage Option, and is about the curious absence of negative pledge clauses in US home mortgages, which enabled enormous amounts of second-lien leverage (much more than anyone realized) during the housing bubble.

[more]