Credit Bureaus Are Making Lenders Buy Trended Data They Don't Need

By Bonnie Sinnock

Equifax and TransUnion have stopped offering traditional credit reports, replacing them with the more expensive trended credit reports that Fannie Mae plans to start using but that other investors don't

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Latest News

Obvion Structuring 39th STORM Dutch Home Mortgage Deal

– Moody’s Investors Service has assigned provisional ratings to five classes of notes in STORM 2016-II B.V., a €1.15 billion pooling of 5,729 30-year home loans to consumers in The Netherlands. The sizes of the Euro-denominated notes are to be determined.

World Omni Driving by with $940M Auto Loan ABS.

– The credit quality of the collateral pool has weakened compared with the sponsor's previous deal, completed in March. FICO scores are lower and there are more loans with extended terms.

In a First, Ford Names Woman to Head Finance Unit

– Ford Motor promoted veteran executive Joy Falotico to lead the Ford Credit lending unit, making her the first woman to run the operation that provides financing to auto buyers and dealers worldwide.

Fitch Cuts Midland's CMBS Special Servicer Rating to 'CSS2'

– The rating agency citing the “aging of the company’s asset management system,” which it said compares less favorably to those of other special servicers that it rates and “is no longer consistent with the highest standards of servicing ability and for managing large volumes of defaulted loans.”


Featured Articles

Struggling Malls Pose Outsized Risk to CMBS

– In just a few years, a popular mall with high-end anchor stores and boutique retail tenants can fall into substandard property condition, leaving commercial mortgage bond investors with outsized losses on their exposure to these properties.

Why Subprime Mortgages Lend Themselves to Securitization

– Many lenders are still reluctant to give mortgages to borrowers with less-than-pristine credit, yet such loans are far more likely than prime jumbo loans to be bundled into collateral bonds. Sreeni Prabhu of Angel Oak Capital credits banks' behavior and higher interest rates for that reality.

Risk Retention May Give Big Banks the Edge in CMBS

– The first commercial mortgage-backed security to comply with "skin in the game" requirements was extremely well received. Market participants credit the way the large banks sponsoring the deal retained the risk – a strategy unavailable to nonbank lenders.

What Mortgage Insurer Merger Means for Lenders

– Arch U.S. MI's acquisition of United Guaranty Corp. will make one of the smallest private mortgage insurers the sector's new market leader. While the move is likely to ease pricing competition among the six remaining players, it's not expected to set off a wave of further consolidation.

"Skin in Game" Rule a Boon for New Breed of CLO Manager

– Rules requiring CLO managers to keep skin in the game of their deals has taken a toll on smaller firms. But the resulting thinning of the ranks has created room for some new players that are better capitalized, including insurance companies.

Banks are Keeping Their Own Skin in This CMBS

– Wells Fargo, Bank of America, and Morgan Stanley could have satisfied regulators by selling the riskiest slice of the commercial mortgage securitization to a designated third party; instead they are collectively holding on to 5% of each tranche of securities issued in the $870.6 million deal.

FHA, Lenders Clash Over Financing Greener Homes

– The Federal Housing Administration is promoting a particular kind of financing for residential energy retrofits that another regulator staunchly opposes. Mortgage lenders and investors have qualms, too, about the impact on their standing in collateral claims.

Why Credit Card Losses Are Poised to Rise

– The unusually strong loan performance in the credit card business lasted longer than many observers expected. But today the industry's prolonged post-crisis era finally appears to be over.


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Current Issue

States Joining Ranks of Student Loan Cherry Pickers

State student loan authorities sense a business opportunity helping graduates who are gainfully employed lower their payments. Their low-cost funding could put them in competition with banks and marketplace lenders.

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