Volume 2015 - Number 4
February 20, 2015
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Fueled by demand from banks, jumbo mortgages accounted for 19.0 percent of total mortgage originations in 2014, according to Inside Mortgage Finance, the highest it has been since 2002. But last year’s jumbo production volume, estimated at $235.0 billion, was down 13.6 percent from 2013. However, total originations declined by 34.4 percent in that time. An estimated $67.0 billion in jumbos were originated in the fourth quarter of 2014 ... [Includes one data chart]
Lenders and investors are getting more comfortable with loans that don’t meet the qualified-mortgage standard, according to industry participants. A non-agency mortgage-backed security backed primarily by non-QMs could be issued as soon as this year. Chris Haspel, a partner and head of capital markets at Fenway Summer, whose Ethos Lending is originating non-QMs, said the “fear level” among rating services and warehouse lenders regarding non-QMs has ...
Separate efforts by the Treasury Department and the Structured Finance Industry Group aimed at attracting investors to new non-agency mortgage-backed securities continue to progress, according to industry analysts. The Treasury is working to facilitate a benchmark non-agency MBS while SFIG continues to develop standards as part of Project RMBS 3.0. Eric Kaplan, a managing director at Shellpoint Partners and leader of Project RMBS 3.0, said ...
Potential investors in jumbo mortgage-backed securities continue to push issuers to make significant changes to the way the market operates. “How is this ever going to be a $300 billion market if everybody has to look at reps and warrants on a deal-by-deal basis?” said Allan Berliant, a portfolio manager at Grantham Mayo Van Otterloo. “There needs to be a streamlined industry standard.” Berliant and many others called for changes at the ABS Vegas conference ...
With new consumer disclosures from the Consumer Financial Protection Bureau set to take effect in August and lenders still grappling with the ability-to-repay rule, due diligence is likely to continue to be a high priority for loans included in jumbo mortgage-backed securities, according to industry participants. Only a handful of jumbo MBS issued in recent years have included third-party due diligence for fewer than 100 percent of the loans. Issuers have been ...
A planned jumbo mortgage-backed security from Credit Suisse received some criticism from Fitch Ratings due to concerns about the origination practices of some of the lenders that contributed mortgages to the deal. The rating service increased its default assumptions for the $405.27 million CSMC 2015-1. “Fitch applied a conservative treatment – higher probability of default – due to its limited visibility to the individual lender origination practices ...
Legal settlements that involve loss mitigation are one of many factors keeping investors away from new jumbo mortgage-backed securities. “Until that stops, it’s going to be hard to rebuild trust,” said James Grady, a managing director and head of the structured finance sector team at Deutsche Asset Management, at the recent ABS Vegas conference. A number of settlements between banks and the Residential MBS Working Group have mandated ...
CashCall recently started offering loans that do not meet qualified mortgage standards. The lender’s “NQM” program targets borrowers who cannot qualify for agency financing. The minimum credit score is 680 and CashCall is flexible in determining ability to repay, including the use of cash flow from investment accounts. Home Loan Servicing Solutions announced this week that no non-agency mortgage-backed security investors have ... [Includes two briefs]
A page of subprime and jumbo data.
- GSE Seller Profile: 4Q14
- GSE Private Mortgage Insurance Profile 4Q14
- Mortgage Profitabiilty 3Q14
- Top Players 3Q14
Most Popular Stories
- What Were Hearing: The Return of the Megabanks (in Mortgages)? / Nationstar Smelling Like a Rose (In Comparison)? / Why Quicken and Freedom May Never Go Public / CMG Mortgage Expects Strong Production Growth
- Can the GOP Succeed in Getting Appropriations Power Over the CFPB?
- Yes, Wells Fargo Has Lost Market Share, but Its Still the Big Kahuna of Mortgages
- Commercial Banks, Thrifts Add to MBS Portfolios in Late 2014
- Walter Reports a $44 Million Loss, Revenue Declines, and a Regulatory Settlement with the CFPB