Rethinking Your Approach to Insurance
Aug 15, 2021 | By JOSEPH CIOFFIThere are pitfalls that those in asset-based financing should be mindful of, particularly when it comes to insurance and protecting collateral against loss. We spoke with Jack Schwartz, managing director of Davis+Gilbert Risk Management LLC, about key issues to keep in mind when buying policies. Jack has been working with clients for over 15 years with a particular emphasis on real estate and lending transactions. In your experience, do lenders and investors appreciate the importance of ...
Read moreSCOTUS Raises the Bar for Standing in Consumer Protection Claims
Jul 15, 2021 | By JOSEPH CIOFFILenders, servicers and others regulated by consumer protection statutes may be able to rest a bit easier following the U.S. Supreme Court’s recent decision in TransUnion LLC v. Ramirez (Ramirez), where the Court filtered out over 75% of claimants in a consumer class action because they did not suffer actual harm from the alleged statutory violations. The Ramirez decision is also potentially favorable to certain loan servicers and others regulated under the Fair Debt Collection Practices Act ...
Read moreHidden Threats to Lien Priority: How Mortgage Lenders Can Hold Their Ground
Jun 13, 2021 | By JOSEPH CIOFFIResidential mortgage lending has seemed to fare reasonably well in the thick of the pandemic due to stimulus and relief programs, but as pandemic-era relief recedes and foreclosures rise, hidden threats to a lender’s first priority lien status may become apparent and require resolution. With foreclosures up 9% in the first quarter of 2021 versus the prior quarter, several recent cases highlight why lenders need to be aware of unique and sometimes regionally-specific issues such as superpriority ...
Read moreA Housing Policy Wish List under a Biden/Harris Administration
Jan 21, 2021 | By JOSEPH CIOFFI2020 (and, by the looks of it, 2021) has taught us that predicting the future is no longer merely a fool’s errand as not even Nostradamus would find success in the prognostication business these days. Yet, as we said in our similar post on the subprime auto industry, we can’t let the uncertainty of the times prevent us from preparing for what may lie ahead in policy and programs from the Biden/Harris administration related to housing and residential mortgage lending and servicing. Clues in the ...
Read moreThe Next Strain of Repo Litigation
Jun 28, 2020 | By JOSEPH CIOFFIAs the economic crisis impairs the value of commercial mortgage-backed securities (CMBS) that collateralize loans to real estate investment trusts (REITs) to finance their investments, there is the prospect of increased margin calls, requiring REITs to provide additional funds to make up shortfalls in value. The case of AG MIT CMO, LLC et al. v. Royal Bank of Canada et al., No. 20-2547 (S.D.N.Y.), which recently settled, is worth examining for its echoes of the past and some important lessons ...
Read moreOn Our Watch: CMBS in the Time of COVID-19
Apr 28, 2020 | By JOSEPH CIOFFIPerhaps no credit market is as much a bellwether for the economic crisis caused by the COVID-19 pandemic than commercial mortgage-backed securities (CMBS). While the impact of relief programs on consumer-based markets remains to be seen, CMBS offers a broad view into the health of consumers, vulnerable industries, the success of stimulus programs on small and medium-sized businesses and the overall economy. Deals in the pipeline may be in jeopardy as parties re-evaluate their positions and ...
Read moreIn A World...Without LIBOR
Apr 02, 2020 | By JOSEPH CIOFFIIt could be the trailer for a thrilling movie, but whether it turns out to be a horror flick or a mystery depends on what happens before December 2021. That’s when the financial community’s reliance on the London Interbank Offered Rate (LIBOR) is expected to be phased out. Proposals are on the table, but the prospect of litigation over LIBOR fallback provisions should prompt parties to promote now the creation of clear protocols and legislation. While the coronavirus (COVID-19) has the ...
Read moreOn Our Watch: COVID-19 Mortgage and Foreclosure Relief
Mar 29, 2020 | By JOSEPH CIOFFIWith the fallout of the 2008 mortgage crisis fresh in our minds and still shaping the market and policy, the government and market participants have acted swiftly to step in and offer some immediate relief for borrowers, while keeping liquidity as high as possible. Federal Action The Federal Housing Finance Agency has made plans to suspend foreclosures and evictions for single-family mortgages backed by Fannie Mae and Freddie Mac for 60 days. The HUD would do so for foreclosures and evictions ...
Read moreMarket Insights in a Time of Crisis
Mar 26, 2020 | By JOSEPH CIOFFIDistance – the space between – defines our present in so many respects, but that’s not what will lead to success in any market. We have distance from each other, distance from our normal life of just days ago and distance from a future without COVID-19. But that distance has underscored the interconnection of people and markets and their actions like nothing has before. Sure, we knew we were all connected, and we knew the cause and effect of factors that drive our economy, but the coronavirus ...
Read moreMortgage Lending and RMBS: Market Momentum Heading into 2020
Dec 19, 2019 | By JOSEPH CIOFFIWith political turmoil, mixed economic signals and some industry-wide changes afoot, unpredictability seems to be the hallmark of the RMBS market. Since unpredictability can make people more dependent on predictions and past experience, we’ve identified some of the key events of 2019 and where they might lead in 2020. Mortgage Lending and Securitization In 2019 we reported on mortgage loan and RMBS performance numbers and noted how much non-qualified mortgages are driving business. While some ...
Read moreResidential Mortgages and RMBS: 2019 60-Second Market Review and Insights
Sep 03, 2019 | By JOSEPH CIOFFIOriginations and Issuances, by the Numbers New mortgage originations reached $474 billion in Q2 2019, up from $437 billion in Q2 2018 (an 8.5% increase), according to data from the Federal Reserve Bank of New York. Housing debt climbed to $9.41 trillion in Q2 2019, up from $9.00 trillion versus a year ago (an increase of 4.6%). Housing debt remains the leading source of consumer debt in the United States at 68% of the $13.86 trillion in national household debt. In Q2 2019, 9.57% of mortgage ...
Read moreTiny Spaces, but Lots of Room for Pace-Type Financing
Nov 20, 2018 | By JOSEPH CIOFFIMove over mortgages – there’s a new kind of real estate that could benefit from a new type of funding. As higher interest rates and rising prices are making affordable housing a challenge in many markets, cities can fight the problem with a small-scale solution – accessory dwelling units (ADUs). What’s an ADU? ADUs are additions (attached or detached) to homes or converted spaces within already existing buildings that can be used as rental units. Local governments on the west coast have become ...
Read moreOnce Bitten, but Not Shy: Subprime Mortgage Lending Is Alluring Again
Oct 31, 2018 | By JOSEPH CIOFFIBright, shiny objects are hard to resist. Like the glowing orb cast by the anglerfish – the last thing its prey sees before the deadly bite – subprime lending is back with the potential for profits shining like a beacon. There are several ways for lenders and investors to grab a piece of the action, but are the latest moves tempting a fate similar to 2007? There’s smoke . . . Although the housing market has been a relative sea of calm in recent years, the mortgage market has slowed down. ...
Read moreResidential Mortgages and RMBS: 60-Second Market Review and Insights
Jul 12, 2018 | By JOSEPH CIOFFIOriginations and Issuances, by the Numbers New mortgage originations reached $428 billion in Q1 2018, down from $491 billion in Q1 2017 (a 12.9% decrease), according to data from the Federal Reserve Bank of New York. However, housing debt climbed to $8.94 trillion in Q1 2018, up from $8.63 trillion versus a year ago (an increase of 3.6%). Housing debt remains the leading source of consumer debt in the United States at 68% of the $13.21 trillion in national household debt. As such, it can be a ...
Read moreSubprime Residential Mortgages and RMBS in 2018: A Tale of Two Cycles
Jan 29, 2018 | By JOSEPH CIOFFITen Years Gone, but the Memory Remains Litigation related to pre-financial crisis subprime mortgage lending and securitization has resulted in a decade-long hangover for many of those who participated in the boom times. The boom actually lasted only four or five years for most participants, but more than a decade later, many are just now drawing closer to resolution of legacy disputes. The lingering headache for lenders, sponsors, trustees and investors explains the caution that has been the ...
Read moreResidential Mortgages and RMBS: 60-Second Market Review and Insights
Sep 25, 2017 | By JOSEPH CIOFFIOriginations and Issuances, by the Numbers New mortgage originations reached $421 billion in Q2 2017, down from $427 billion in Q2 2016 (a 1.41% decrease). Housing debt reached $9.14 trillion in Q2 2017, up from $8.84 trillion in Q2 2016 (a 3.82% increase). Housing debt, at 68% of the $12.8 trillion in national household debt, continues to be far and away the leading form of consumer debt in the United States. Even so, quarterly originations are less than half than they were at their peak of ...
Read moreOh, the Indemnity! Claims for Reimbursement May Follow RMBS Litigation Settlements
Jun 16, 2017 | By JOSEPH CIOFFI AND SEIJI NEWMANWhen the Roman philosopher, Seneca, said, “Every new beginning comes from other beginning’s end,” he probably didn’t have litigation cycles in mind, but the quote is apropos of recent actions by defendants in RMBS litigation on the heels, or in anticipation, of their concluding litigation. The statute of limitations may have expired on new claims for repurchase or fraud based on alleged loan defects in pre-financial crisis subprime RMBS deals, but a settlement or litigation award paid out by a ...
Read moreBanking Exchange, “Tick, Tick, Tick for DOJ. With Time Running Out, Feds Ramp Up Mortgage Litigation”
Jan 07, 2017 | By JOSEPH CIOFFIThis Banking Exchange article, prompted by the DOJ’s recent lawsuit against Barclays, discusses the longer statute of limitations available to the government, relative to private plaintiffs, to sue participants in the subprime mortgage securitization process. As Joseph states, for the immediate future “the 10-year statute of limitations remains an arrow in the government’s quiver.” Click here to view the full article.
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