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Volume 2017 - Number 4

February 17, 2017

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Jumbo Originations Decline for Second Consecutive Quarter, Market Share Down

Originations of non-agency jumbo mortgages declined in two consecutive quarters to end 2016, according to a new ranking and analysis by Inside Nonconforming Markets. And while jumbo production was up last year compared with 2016, market share for the sector declined during that time. In recent years, jumbo originations and market share have been on a strong upward trend, though the momentum stalled in the second half of 2016. An estimated ... [Includes one data chart]

Chase Changes Strategy with Latest MBS

JPMorgan Chase is preparing to issue another large non-agency mortgage-backed security, but the deal includes some significant differences compared with the two large portfolio risk-transfer MBS the bank issued last year. The biggest change is that Chase appears to be planning to sell most of the MBS to investors. On the two large portfolio risk-transfer MBS that Chase issued in 2016, the bank retained about 90.0 percent of the issuance. At the time, Chase officials cited ...

Some Variety in Nonprime MBS from Invictus

The first nonprime mortgage-backed security from an affiliate of Invictus Capital Partners will be stocked with loans that have some unique features. Kroll Bond Rating Agency, Morningstar Credit Ratings and S&P Global Ratings placed preliminary AAA ratings on the deal last week. The planned $145.02 million Verus Securitization Trust 2017-1 differs in a number of ways from the $225.75 million COLT 2016-3 Mortgage Loan Trust, the nonprime MBS from an affiliate of Lone Star Funds ...

Galton to Include Non-QMs in New MBS

An affiliate of Galton Funding is preparing to issue a non-agency mortgage-backed security that will include non-qualified mortgages, according to documents filed with the Securities and Exchange Commission. Galton Funding acquires mortgages on a correspondent basis. The firm is part of Galton Capital Group, which is the residential mortgage investment group within Mariner Investment Group. Mariner is a New York-based investment advisor that manages about ...

Nonprime Lenders Gear Up for Rated MBS

Fitch Ratings recently assigned “average” assessments to three originators and aggregators involved in the nonprime mortgage market, the same grades the firm assigned to Caliber Home Loans. Fitch evaluated Angel Oak Home Loans, Angel Oak Mortgage Solutions and Citadel Servicing as originators of nonprime mortgages. And the rating service reviewed Deephaven Mortgage as an aggregator of nonprime mortgages. The assessments by Fitch will help pave the way for ...

Invictus Plotting Nonprime Growth with Verus

Invictus Capital Partners, an investment management firm, started aggregating nonprime mortgages in August 2015. The firm has purchased more than 400 mortgages and has plans for further growth. Invictus aggregates mortgages through an affiliate, Verus Mortgage Capital. Verus is set to issue its first nonprime mortgage-backed security – a $145.02 million deal that’s scheduled to close on Feb. 22. Verus has acquired $300.0 million of nonprime mortgages, according to ...

Revised CHOICE Act Aims to Limit CFPB

A revised version of the Financial CHOICE Act could make changes to the Consumer Financial Protection Bureau that are so significant that other provisions in the bill aiming to loosen standards for qualified mortgages might not be necessary. Rep. Jeb Hensarling, R-TX, chairman of the House Financial Services Committee, introduced HR 5983, the Financial CHOICE Act, in September and the committee approved the bill largely on a party-line vote that month. The bill covered a wide ...

Sales Help Reduce GSE Nonprime Holdings

Sales of mortgages and non-agency mortgage-backed securities helped reduce the government-sponsored enterprises’ exposure to nonprime mortgages in 2016. As of the end of the year, Fannie Mae and Freddie Mac held a combined $141.45 billion in purchased/guaranteed nonprime mortgages and nonprime MBS. The holdings were down by 5.8 percent from the end of the third quarter and 22.0 percent below the level at the end of 2015 ... [Includes one data chart]

News Briefs

Parkside Lending announced this week that it’s offering a new low-downpayment jumbo mortgage product that includes an option for lender-paid mortgage insurance or borrower-paid MI. The new Jumbo III product joins other wholesale jumbo offerings from Parkside, including mortgages with combined loan-to-value ratios up to 95.0 percent with no requirement for MI. Blackstone Group increased its presence in the market for rental properties by launching Finance ... [Includes two briefs]

Average Jumbo Mortgage Interest Rates and Mortgage Performance

A page of jumbo data and the performance of non-agency mortgage-backed securities.


With rates higher this year, there has been talk of lenders liberalizing their underwriting standards in an effort to increase volume and make up for lower refis.

Do you think your shop will loosen standards over the coming three months?

Yes, but not by much.
Yes, by a lot.
Yes and, heck, we may even do non-QM lending.
No, not at all.
No and we may even tighten credit.

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