Jumbo Mortgages

Browse articles from all of our Newsletters related to Jumbo Mortgages.

May 29, 2015 - Inside FHA/VA Lending

Streamline Refis Power VA-Backed MBS, FHA Up in Most States

Security issuances backed by VA loans totaled $35.5 billion in the first quarter of 2015, with VA streamline refinance loans accounting for 57.7 percent, according to an Inside FHA/VA Lending analysis of Ginnie Mae data. Approximately $20.5 billion in VA interest rate reduction refinancing loans were securitized during the first three months as borrowers took advantage of lower interest rates. “For the last three to four months, rates have been bottoming out again, and if rates are lower it makes sense to refinance,” said Jon Shrum, vice president of Commerce Home Mortgage, a VA-certified lender in Huntington Beach, CA. An estimated $14.5 billion in VA purchase mortgages also were securitized during period. VA loans comprised 13.1 percent of all loans in Fannie Mae, Freddie Mac and Ginnie Mae mortgage-backed securities. California, Virginia, Texas, Florida and Washington, ... [2 charts]


May 29, 2015 - Inside Nonconforming Markets

Subprime Volume Indicators and Performance

A page of subprime and jumbo data.


May 29, 2015 - Inside Nonconforming Markets

Variation in Jumbo MBS from Chase, Credit Suisse

JPMorgan Chase and Credit Suisse are coming to market with separate jumbo mortgage-backed securities that have some sharp differences in terms of collateral. The $379.78 million JPMorgan Mortgage Trust 2015-3 includes some unique characteristics such as a handful of loans with combined loan-to-value ratios above 80.0 percent and some interest-only mortgages. While the average combined LTV ratio for mortgages to be included in the deal is 69.9 percent, 15 mortgages ...


May 29, 2015 - Inside Nonconforming Markets

Jumbo Lenders Look Beyond Credit Scores

The strong performance of jumbo mortgages originated in recent years is due to more than just focusing on borrowers with healthy credit scores, loan-to-value ratios and debt-to-income ratios, according to Moody’s Investors Service. The analysts said “soft” qualitative underwriting factors play a major role in jumbo performance. Qualitative factors considered by jumbo lenders include the absence of negative events in a borrower’s credit history, the number of unblemished lines of credit and ...


May 29, 2015 - Inside Nonconforming Markets

FHFA Prepares for Increase to Loan Limits

The Federal Housing Finance Agency is making plans for how to increase the baseline conforming loan limit beyond $417,000 as home prices are close to recovering from the financial crisis. The FHFA last week announced that it will use the “expanded data” house price index that the agency has published since 2011 to make adjustments to the baseline conforming loan limit. A change to the baseline limit would also impact limits for high-cost areas, which are allowed to be ...


May 29, 2015 - Inside Nonconforming Markets

Jumbo Lending in 1Q15 Up Sharply From A Year Ago, But Slight Gain Over 4Q14

Originations of jumbo mortgages continued strong in the first quarter of 2015, according to a new ranking and analysis by Inside Nonconforming Markets. An estimated $70.0 billion in jumbos was originated during the quarter, up 59.1 percent compared with the first quarter of 2014. A number of jumbo lenders more than doubled their production during that time. “Our jumbo pipelines are near record high, as the demand for jumbo mortgages remains healthy,” said ... [Includes one data chart]


May 29, 2015 - Inside MBS & ABS

Pilot MPF Direct Program Between FHLB of Chicago and Redwood Expands to Four Banks Total, More Expected

A pilot jumbo loan program between the Federal Home Loan Bank of Chicago and Redwood Trust has grown to include three more FHLBanks, with the potential to expand to more. Mortgage Partnership Finance Direct is specifically a high-balance loan product that connects the Mortgage Partnership Finance conduit program with Redwood Trust to offer access to private capital when selling fixed-rate mortgages in the secondary market. Eric Schambow, senior vice president and director of the Chicago FHLBank’s MPF Program, said...


May 15, 2015 - Inside FHA/VA Lending

Premium Reduction Helped Fuel 1Q Jump in FHA Loan Production

Price reduction and improving economic factors helped push FHA volume up in the first quarter of 2015, according to an Inside FHA/VA Lending analysis of agency data. Production of forward single-family mortgages insured by FHA increased by 12.3 percent in the first quarter to $39.5 billion from $35.2 billion in the prior quarter, powered by a sharp uptick in refinances. FHA’s total refi business jumped from $2.29 billion in endorsements in February, a month of record snowstorms in the Northeast, to $8.15 billion in March. Total FHA forward-mortgage business rose by 83.8 percent from February, data showed. FHA streamline refis rose a whopping 144.1 percent quarter-over-quarter while conventional-to-FHA refis jumped 29.2 percent over the same period. Falling purchase loan volume, which was the reason for the overall decline in FHA originations last year, spilled over into ... [2 charts]


May 15, 2015 - Inside Nonconforming Markets

Subprime Volume Indicators and Performance

A page of subprime and jumbo data.


May 15, 2015 - Inside Nonconforming Markets

News Briefs

Impac Mortgage Holdings increased its originations of non-qualified mortgages in the first quarter of 2015. The nonbank had $11.3 million in originations of its AltQM products during the quarter, topping the $7.0 million in non-QM production Impac had in the second half of 2014. Underwriting standards for jumbo mortgages continued to loosen in April, according to the Mortgage Bankers Association. Underwriting for jumbos has loosened almost every month since ... [Includes three briefs]


May 15, 2015 - Inside Nonconforming Markets

Nonbanks Face Jumbo Pricing Issues, But Remain Optimistic About MBS Issuance

Interest rate volatility and other issues caused a reduction in jumbo-related profitability at some nonbanks in the first quarter of 2015. However, many nonbank conduits remain optimistic that the jumbo business will pay off, particularly via issuance of mortgage-backed securities. Redwood Trust reported $2.0 million in income from residential mortgage banking activities in the first quarter of 2015, down 80 percent from the previous quarter. The decline was primarily due to lower margins on ...


May 8, 2015 - Inside MBS & ABS

Strong Support from AAA Investors for New Stop- Advance Feature in Redwood’s Latest Jumbo MBS

A unique stop-advance feature included in the jumbo MBS issued by Redwood Trust late last week was viewed favorably by investors, according to officials at the real estate investment trust. “We are pleased not only with the pricing execution on this transaction, but also with the level and depth of AAA investor interest,” Marty Hughes, Redwood’s CEO, said this week. The $356.45 million Sequoia Mortgage Trust 2015-2 included...


May 1, 2015 - Inside FHA/VA Lending

FHA Announces 90-Day Delay in SF Policy Handbook Effective Date

The FHA Single-Family Policy Handbook’s effective date has been changed from June 15 to Sept. 14, 2015, the agency has announced. The affected sections include the following: Doing Business with FHA – Lenders and Mortgagees; Doing Business with FHA – Other Participants – Appraiser; and Quality Control, Oversight and Compliance. The section for Origination through Post Closing/Endorsement (OTPC/E) becomes effective for FHA case numbers assigned on or after Sept. 14. All applicable existing single-family handbooks, mortgagee letters and policy documents continue to apply until the OTPC/E section becomes effective, the agency said. A number of competing initiatives prompted the change of effective date. The FHA expects lenders to be fully compliant by Sept. 14. The FHA will continue to issue mortgagee letters periodically to ...


May 1, 2015 - Inside FHA/VA Lending

FHA Jumbo Volume Suffers Steep Decline in 2014 as Activity Slowed

FHA jumbo loan production dropped significantly in 2014, according to an Inside FHA/VA Lending analysis of agency data. The volume of jumbo loans insured by the FHA – loan amounts exceeding $417,000 up to the national ceiling of $625,500 – fell 41.9 percent from the prior year, and 4.4 percent in the fourth quarter of 2014 from the previous quarter. FHA jumbo production for 2014 totaled $10.5 billion, with purchase loans accounting for nearly 80 percent of volume and fixed-rate loans comprising 87.1 percent of jumbos originated last year. Seventy-two percent of lenders saw their jumbo volume decline, including Provident Savings Bank, which suffered the largest year-over-year drop (84.9 percent). An analysis of FHA endorsements by loan amount show that loans above $417,000 up to $499,000 accounted for 2.12 percent of loans endorsed in the first quarter. Additionally, loans from $500,000 to ... [1 chart]


May 1, 2015 - Inside Nonconforming Markets

Subprime Volume Indicators and Performance

A page of subprime and jumbo data.


May 1, 2015 - Inside Nonconforming Markets

Two Largest Issuers Deliver Latest Jumbo MBS

Credit Suisse and Redwood Trust, the two dominant jumbo mortgage-backed securities issuers since 2010, continue to differ in terms of jumbo MBS offerings. While their latest deals include a number of similarities involving credit characteristics, the Redwood deal includes a relatively high share of non-qualified mortgages. The $356.45 million Sequoia Mortgage Trust 2015-2 received AAA ratings with credit enhancement of 5.00 percent on the senior tranche. That’s the lowest ...


May 1, 2015 - Inside Nonconforming Markets

First Republic Remains Top Jumbo MBS Lender

First Republic Bank maintained its lead as the top contributor to jumbo mortgage-backed securities issued in the first quarter of 2015, according to a ranking by Inside Nonconforming Markets. First Republic was identified as contributing $1.43 billion to jumbo MBS issued during the quarter, accounting for 31.0 percent of all jumbo MBS activity. The bank was also the top jumbo MBS contributor for all of 2014, with $1.46 billion in identified contributions ... [Includes one data chart]


May 1, 2015 - Inside Nonconforming Markets

Five Oaks Issues Its First Jumbo MBS

Five Oaks Investment this week issued its first jumbo mortgage-backed security, although the real estate investment trust has contributed to jumbo MBS issued by others. The $267.19 million Oaks Mortgage Trust Series 2015-1 received largely favorable reviews from the rating services, though Five Oaks’ lack of a track record in the jumbo MBS market helped prompt credit enhancement of 8.45 percent on the senior tranche. Both Fitch Ratings and Moody’s Investors Service said they found that ...


May 1, 2015 - Inside Nonconforming Markets

Hatteras Builds Holdings of Jumbo ARMs

Hatteras Financial has started to acquire jumbo adjustable-rate mortgages that offer more attractive returns than agency mortgages. Officials at the real estate investment trust note that while Hatteras started operations in 2007, the REIT did not start investing in individual loans until December. “I’m not sure that we know 100 percent what the extent of the opportunity is going to be,” Michael Hough, Hatteras’ chairman and CEO, said during a recent call with investors. “It is something ...


May 1, 2015 - Inside MBS & ABS

Structure of Some AAA-Rated Jumbo MBS Seen as Exposing Investors to Outsized Risk

While jumbo MBS issued in recent years have performed exceptionally well, some senior-support bonds on new jumbo MBS have credit risks similar to what was experienced during the financial crisis, according to analysts at Andrew Davidson & Co. In a recent analysis, Richard Ellson and Allison Ying raised concerns about the super-senior structures that have become common on jumbo MBS in recent years. They noted that when Redwood Trust started working to revive jumbo MBS issuance in 2010, the issuer used a much simpler structure. However, in the past few years, Redwood and many other issuers have increasingly used...


May 1, 2015 - Inside MBS & ABS

Treasury Sees Deal Agent Position for New Non-Agency MBS as Having a Duty of Care and Loyalty for Investors

To attract large investors, the Treasury Department suggests that non-agency MBS include a deal agent with a fiduciary duty. “Under corporate law, directors must discharge two primary fiduciary duties: duty of care and duty of loyalty,” said Michael Stegman, counselor to the Treasury on housing finance policy, in a speech late last week. “In the context of private-label securitizations, these duties seemed sensible and logical to us.” He used...


April 30, 2015 - Inside Mortgage Finance

Wall Street Firm Eyeing Multiple Lenders; Former Lehman Exec to Manage Fledgling Mortgage Operation

The Blackstone Group is on the hunt to buy mortgage companies, including both lenders and servicers, according to industry advisors and others who have been briefed on the company’s plans. Blackstone, without disclosure, recently purchased Gateway Funding in Horsham, PA, and is in negotiations to buy PMAC Lending Services, sources contend. It also is talking to a company that goes by the name of Pinnacle, though there are several firms with that name, and at press time it was unclear which one. Observers describe...


April 24, 2015 - Inside MBS & ABS

Changes to GSE Guaranty Fees and LLPAs Yield A Big Fat Zero for the Jumbo MBS Market

Firms hoping that new guaranty fee and loan-level price adjustments promulgated by the Federal Housing Finance Agency might boost the jumbo MBS market were sorely disappointed when the final details were released by the agency late last week. One executive who works for a real estate investment trust that issues jumbos said it’s clear to him that Fannie Mae and Freddie Mac are continuing to “misprice” their g-fees. He would love...


April 23, 2015 - Inside Mortgage Finance

Modest Changes to GSE MBS Guaranty Pricing Likely To Have Little Impact on FHA, Jumbo Originations

The Federal Housing Finance Agency late last week directed Fannie Mae and Freddie Mac to stop charging the 25 basis point “adverse market” fee assessed on all loans since the financial crises, but most lower-risk loans won’t get any reduction in loan-level pricing adjustments. As expected, the FHFA did not make any changes to the “base” guaranty fees charged by the two government-sponsored enterprises. Current fees, on average, are at an “appropriate” level. “We are going to monitor this on an ongoing or quarterly basis and we’ll adjust based on market conditions,” said Sandra Thompson, FHFA’s deputy director. The regulator instructed...


April 17, 2015 - Inside Nonconforming Markets

Subprime Volume Indicators and Performance

A page of subprime and jumbo data.


April 17, 2015 - Inside Nonconforming Markets

Marketplace Lender Eyes Non-Agency Mortgages

LendingHome announced this week that it has originated more than $100 million in loans since launching a year ago, focusing on flexible financing options for investors with a wide range of credit characteristics. The firm is a marketplace lender, connecting borrowers with investors. To this point, LendingHome has focused its originations on bridge loans and loans for investor properties. Officials at the lender said LendingHome plans to offer nonconforming mortgages this year with ...


April 17, 2015 - Inside Nonconforming Markets

Low Credit Enhancement on Pending Jumbo MBS

The latest jumbo mortgage-backed security from Two Harbors Investment is set to have the lowest credit enhancement levels of any deal issued this year, according to an analysis by Inside Nonconforming Markets. Strong performance and underwriting characteristics along with repeat issuance appears to have helped decrease credit enhancement requirements for the transaction. The $241.06 million Agate Bay Mortgage Trust 2015-3 received a preliminary AAA rating ... [Includes one data chart]


April 17, 2015 - Inside Nonconforming Markets

Deal Agent for Jumbo MBS Gaining Traction, But Plenty of Other Hurdles

Use of a deal agent in new non-agency mortgage-backed securities will help convince large investors to return to the market, according to industry participants. The benchmark non-agency MBS in the works with help from the Treasury Department will include a deal agent, according to Michael Stegman, counselor to the Treasury on housing finance policy. At a talk this week hosted by the Financial Services Roundtable and CoreLogic, Stegman noted that Treasury continues to ...


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