CDS Written on B of A Surge

Mortgage & Real Estate

Credit-default swaps on Bank of America, the nation’s largest residential servicer, this week surged to the highest level since April 2009 before paring those gains.

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The contracts have been pushed to the highest ever relative to its peers as investors speculate that B of A will have to bolster capital as mortgage investors sue to force the bank to buy back faulty home loans or pay damages on MBS.

According to combined news reports, Fannie Mae, in particular, has increased its buyback claims against the bank.

B of A is in the process of trying to sell some of its mortgage servicing rights. (See related story on this website.)

Daily Briefing | Friday, August 12, 2011

  • Deutsche Bank Picked to Sell Aurora Loan Services

    Deutsche Bank has been chosen to sell Aurora Loan Services, the Colorado-based mortgage banking division of Aurora Bank FSB, according to industry officials.

  • Thanks to Lower Rates, Apps Surge at Skyline

    Thanks to crumbling mortgage rates loan applications are up by at least 30% at Skyline Financial, Agoura Hills, Calif., a nonbank lender headed by industry veteran Bill Dallas.

  • Unit Owned by Ocwen Chief Readies IPO

    Home Loan Servicing Solutions Ltd., a newly formed Cayman Island corporation controlled by Ocwen CEO Bill Erby, plans to sell 18.3 million shares in its initial public offering, raising $316.3 million from investors.

  • HUD Worries About HECM Property Charges

    The Department of Housing and Urban Development is developing a set of
    policy changes that would require reverse mortgage lenders to better underwrite Home Equity Conversion Mortgages. But lenders may beat HUD to the punch.

  • IMA Selling Lender/Servicer but Won’t ID Firm

    Interactive Mortgage Advisors, LLC has been hired to sell a full service mortgage banking firm – including production, servicing and insurance units – but is keeping the identity of the company a secret, at least for now.

  • Navy FCU Will Cover Closing Costs

    Navy Federal Credit Union, Vienna, Va., is offering to pay up to $2,500 in closing costs for its mortgage borrowers; the offer covers both purchase and refinance transactions.

  • All Quiet From B of A, Fannie on Reported MSR Sale

    Early Friday morning the mortgage banking industry had yet to learn who exactly bought Bank of America’s $73 billion mortgage servicing portfolio with the bank declining to provide much in the way of details.

  • Triad Loses $4 Million

    Triad Guaranty Inc., the Winston-Salem-based mortgage insurer which is operating in run-off, lost $4.4 million during the second quarter, compared with net income of over $79 million one year prior.

  • Mortgage Fraud Down, But Still At Elevated Risk

    National mortgage fraud risk is down 2.3% from a year ago and is 1% lower than the previous quarter, but is still at an elevated risk, Interthinx said in its latest Mortgage Fraud Risk Report.

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