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Volume 2015 - Number 24

November 25, 2015

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Jumbo Lending Declines in Third Quarter, Competition for Production Still Strong

Originations of jumbo mortgages declined in the third quarter of 2015 compared with the previous quarter, according to a new ranking and analysis by Inside Nonconforming Markets. A number of lenders continue to loosen underwriting standards and offer favorable pricing in an effort to originate jumbos. An estimated $85.0 billion in jumbo mortgages were originated in the third quarter. While production fell 8.6 percent on a quarterly basis, originations through ... [Includes one data chart]

SFIG, Treasury Continue Non-Agency MBS Efforts

The Structured Finance Industry Group and the Treasury Department continue to work on complementary initiatives to revive the non-agency mortgage-backed security market. SFIG’s upcoming plans include a push for transparency among issuers, while the Treasury has shifted its focus somewhat away from a benchmark non-agency MBS transaction. Eric Kaplan, a managing director at Shellpoint Partners and one of the leaders of SFIG’s RMBS 3.0 effort, said SFIG is ...

Progress, Complications with Non-Agency MBS

The latest developments in the Structured Finance Industry Group’s effort to revive the non-agency MBS market have been met with praise from many industry participants. However, larger issues continue to constrain activity in the market. SFIG recently released a package of model representations and warranties for non-agency MBS. “I think this effort to standardize reps and warrants is a really important step in helping investors get more comfortable with the sector,” Grant Bailey ...

Bank First-Lien Holdings Up in Third Quarter

First-lien portfolio holdings continued to increase in the third quarter of 2015, according to a new Inside Nonconforming Markets analysis of bank and thrift call reports. Banks and thrifts held $1.85 trillion in first-lien mortgages in portfolio at the end of September, up 0.3 percent compared with the end of the second quarter and a 2.8 percent increase compared with the third quarter of 2014. Wells Fargo had the largest portfolio at $266.3 billion as of ... [Includes one data chart]

Hatteras Prepares to Issue Its First Jumbo MBS

Hatteras Financial is working to issue a jumbo mortgage-backed security backed by adjustable-rate mortgages. The real estate investment trust has acquired more than $275 million in jumbo ARMs since launching its conduit operations last year. The planned jumbo MBS from Hatteras is Onslow Bay Mortgage Loan Trust 2015-1, according to documents filed with the Securities and Exchange Commission last week. The REIT’s conduit operates as Onslow Bay Financial ...

Strong Divide on Portfolio QM Bill

President Obama last week threatened to veto legislation progressing in Congress to provide qualified-mortgage status to loans held in portfolio by depository institutions. Industry analysts suggest that the bill still has a chance at being signed into law, if adjustments are made. The House approved H.R. 1210, the Portfolio Lending and Mortgage Access Act, on a 255-174 vote last week. Similar legislation is under consideration in the Senate. The bill in the House would ...

Subprime Delinquencies Decline; Long Foreclosures

Delinquencies on subprime mortgages continued to decline in the third quarter of 2015, according to the Mortgage Bankers Association. The trade group said the non-seasonally adjusted serious delinquent rate for subprime mortgages hit 12.66 percent at the end of September, the ninth consecutive quarterly decline. The subprime serious delinquent rate was down from 13.40 percent in the second quarter of 2015, 15.52 percent in the third quarter of 2014 and 21.25 percent in ...

News Briefs

The Federal Housing Finance Agency announced this week that the baseline conforming-loan limit for the government-sponsored enterprises will remain unchanged in 2016 at $417,000. High-cost loan limits will increase in 39 counties next year, up to a maximum of $625,500 in the continental U.S. Fitch Ratings downgraded various servicer ratings for Residential Credit Solutions last week. The rating service said regulatory scrutiny ... [Includes four briefs]

Subprime Volume Indicators and Performance

A page of subprime and jumbo data.


Should the FHA cut premiums?

Yes, the MMIF has surpassed the 2 percent minimum. It’s time to help first-time home buyers.
Yes, but not until mid-2016 at least, when we see how the fund is doing.
No. The MMIF needs to rebuild and prepare for another potential downturn – just in case.
No. We believe the minimum ratio should actually be raised to 4 percent or higher.
I am undecided.

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