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Special Reports
In this section of BrokerUniverse we examine a subject of key importance
for mortgage originators every month, based on special reports that run in our sister publication, Origination News.
Return of Subprime
Return Of Subprime: Back in the Spotlight
This Special Report is titled the "Return of Subprime," but that begs
the question, did subprime ever go away? For three of the more significant originators of this product the answer
is no. Not only are New Century, Delta and NovaStar having strong, if not record performances to date, all three
have consistently increased their earnings-per-share estimates for fiscal year 2003. Read about their third-quarter
performance in this Special Report.
There is another way to look at the title. Instead of using "of," maybe
it should read the "Return TO Subprime." The president of the company that has just opened shop, Michael
McQuiggan of Lenders Direct Capital Corp., declared, "This is the perfect time to start a mortgage company
specializing in niche products like second mortgages, subprime and alt-A loans."
Why? Because as other industry observers point out, as refinancings wane, there
will be margin compression in the prime business as those lenders compete over less volume.
To keep margins up, many lenders and brokers who have forsaken lower credit quality
business for the easy refi buck will once again discover the pool of customers that is less interest rate sensitive
when making their mortgage decision.
However, in subprime, things can go wrong, and in this Special Report, read the
latest news about one former high-flyer, FirstPlus. The company settled investor class action lawsuits.
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