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Volume 2015 - Number 6

March 20, 2015

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Non-Agency Lending – Beyond Jumbos For Affluent Borrowers – A Difficult Goal

The non-agency mortgage business looks attractive to many companies, but it is a difficult market to get into, according to experts speaking at a mortgage servicing conference sponsored by Information Management Network this week in New York. Non-agency originations outside of portfolio jumbos have been limited due to certain allowances for the government-sponsored enterprises and the lack of demand for mortgage-backed securities, among other issues ...

Bank/Thrift First-Lien Holdings Up in 2014

Bank and thrift portfolio holdings of first-lien mortgages increased in 2014, according to an Inside Nonconforming Markets analysis of call reports. Retention of new jumbo mortgages and even some conforming loans helped outpace portfolio runoff. Banks and thrifts held a total of $1.77 trillion in first-lien mortgages at the end of the fourth quarter of 2014. The holdings increased by 0.3 percent compared with the previous quarter and were up ... [Includes one data chart]

WinWater, Two Harbors Prep Jumbo MBS

WinWater Home Mortgage and Two Harbors Investment are preparing to issue separate jumbo mortgage-backed securities, according to presale reports. WinWater’s deal is set to include some non-qualified mortgages while Two Harbors’ jumbo MBS sticks with the type of mortgages that have dominated jumbo MBS issued in recent years. The $287.74 million WinWater Mortgage Loan Trust 2015-3 is set to receive AAA ratings with credit enhancement of ...

Five Oaks Joins FHLB System, Plots Jumbo Growth

A moratorium of real estate investment trusts gaining membership in the Federal Home Loan Bank system ended recently when the captive insurer of Five Oaks Investment was approved as a member of the FHLBank of Indianapolis. The REIT revealed this week that Five Oaks Insurance gained FHLBank membership on Feb. 24. “FOI is currently negotiating agreements for advances with the FHLBank and, although no assurance can be given, FOI anticipates ...

Varied Reps on Jumbo MBS Seen as Effective

The two main types of representation-and-warranty frameworks used in jumbo mortgage-backed securities can both effectively protect investors, according to Moody’s Investors Service. Each framework presents different risks, and industry participants suggest that other aspects of deals carry more importance for investors. Jumbo MBS issued in recent years have largely included either an open-ended rep-and-warrant framework or a prescriptive framework ...

Mixed Trends for ARM Originations in 2014

Originations of adjustable-rate mortgages were nearly level in 2014 compared with the previous year, according to a new ranking by Inside Nonconforming Markets. The ARM share of total originations increased because mortgage production overall was down in that time, though some big banks that dominate ARM originations also slowed their production. An estimated $198.0 billion in ARMs were originated in 2014, up 1.0 percent ... [Includes one data chart]

HAMP Servicers Faulted for Processing Delays

Non-agency servicers participating in the Home Affordable Modification Program have room for improvement, according to the latest testing results completed on behalf of the Treasury Department. While no servicers were in danger of having HAMP incentive payments withheld, the Treasury said Nationstar Mortgage, Ocwen Financial and Select Portfolio Servicing were all in need of “moderate” improvement as of the fourth quarter of 2014 ... [Includes one data chart]

Market Need Seen for an Alternative Mortgage

Thirty-year fixed-rate mortgages have served borrowers relatively well, but there are issues that could be addressed by an alternative product, according to new research from staff at the Federal Reserve Bank of New York. “Ideally, an alternate mortgage instrument would alleviate the downpayment constraint associated with the transition to homeownership, eliminate any scope for discrimination in mortgage qualification or pricing and allow ...

News Briefs

The outstanding balance of non-agency mortgage-backed securities increased in February on a monthly basis, according to a Standard & Poor’s analysis of remittance data. The increase was a rare occurrence as non-agency MBS outstanding has regularly declined since 2009. Of the more than 20,000 jumbo mortgages Redwood Trust has acquired as part of its jumbo conduit activities since 2010, only 11 have gone 60-plus days delinquent ... [Includes five briefs]

Subprime Volume Indicators and Performance

A page of subprime and jumbo data.


With the recent dip in interest rates, how do you feel about loan volumes this year?

We see loan production ending 2015 flat compared to 2014.


We’re optimistic that our originations will rise by 10 to 20 percent year over year.


We’re really optimistic: We expect production to increase by 20 percent or better from last year.


We’re not so bullish. Originations for us may actually fall.


Housing Pulse