Jumbo Mortgages

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

June 26, 2015 - Inside FHA/VA Lending

Handbook FAQs Hold No Surprises, But More Guidance Expected

The frequently-asked-questions guidance to using the FHA’s consolidated Single Family Policy Handbook is good to have though it shows just how complicated the FHA’s mortgage origination process is, according to lenders. In fact, the updated FHA handbook could still be confusing to borrowers simply because a lot more information is concentrated in one source, lenders said. According to the FHA, the more than 290 FAQs will enable lenders to make operation adjustments before the handbook goes into effect on Sept. 14, 2015. The FAQs are for information purposes only and do not apply to current FHA policies. They do not establish or modify policy contained in the handbook. The FAQs reiterate information in the handbook under headings such as Credit Underwriting, Closing and Insuring, FHA System Support and Consumer Information. Industry observers noted that the FAQs did not ...


June 26, 2015 - Inside FHA/VA Lending

FHA Jumbo Originations Rise in 1Q, Purchase Loans Fuel Increase

FHA jumbo loan production rose nearly 36.9 percent in the first quarter, ending the period with $3.8 billion in new volume, according to an Inside FHA/VA Lending analysis of agency data. Volume includes all FHA loans exceeding $417,000. It was also up significantly, 59.6 percent, from the same period a year ago. Purchase loans accounted for 52.8 percent of FHA jumbos originated during the first three months of 2015, and 93 percent were fixed-rate purchase and refinance loans. The top five FHA jumbo lenders – Quicken Loans, Wells Fargo Bank, Prospect Mortgage, Pinnacle Capital Mortgage Corp., and LoanDepot – reported increases on a quarter-to-quarter basis. Together, the elite group accounted for 13.0 percent of the FHA jumbo market. The largest quarter-to-quarter increases were mostly mid-level FHA jumbo lenders. For example, 12th-ranked Freedom Mortgage, a top player in the ... [ 1 chart ]


June 26, 2015 - Inside Nonconforming Markets

Subprime Volume Indicators and Performance

A page of subprime and jumbo data.


June 26, 2015 - Inside Nonconforming Markets

Mixed Response for Redwood’s Latest Innovation

A new feature Redwood Trust has included in its two most recent jumbo mortgage-backed securities has prompted support from AAA investors along with mixed reactions from rating services. The $356.45 million Sequoia Mortgage Trust 2015-2 issued in April and the $343.21 million Sequoia Mortgage Trust 2015-3 that was issued this week included a unique stop-advance feature. Servicers of the loans won’t be allowed to provide advances of principal and interest on loans that are 120+ days delinquent. The jumbo MBS were rated by Kroll Bond Rating Agency and Moody’s Investors Service ...


June 26, 2015 - Inside Nonconforming Markets

Statute of Limitations Ruling a Concern

A recent ruling by the New York Court of Appeals regarding the statute of limitations for representation-and-warranty claims on non-agency mortgage-backed securities has caused concerns for some participants in the new-issue jumbo MBS market. In ACE Securities v. DB Structured Products, the court ruled that the statute of limitations for claims of breaches of reps and warrants starts when a deal is closed, not when a potential breach is discovered. Lawyers involved in non-agency MBS were divided on how the ruling would impact issuance going forward ...


June 26, 2015 - Inside Nonconforming Markets

Variety Seen in Jumbo Underwriting Standards

While the characteristics of loans included in jumbo mortgage-backed securities continue to be strong overall, industry analysts note that there are significant differences in “soft” underwriting guidelines used by lenders. “Not all underwriting guidelines, and exceptions to guidelines, are created equal,” analysts at Morningstar Credit Ratings cautioned in a recent report. “Some originators recently have introduced programs that make qualifying for financing easier and require less income documentation.” The company, which is making a new push to rate jumbo MBS, reviewed the guidelines of a number of the most active jumbo originators and aggregators ...


June 19, 2015 - Inside MBS & ABS

Concerns Raised About the Stop-Advance Feature Redwood Is Including in Its New Jumbo MBS

Redwood Trust is preparing to issue its second consecutive jumbo MBS that includes a new stop-advance feature. While officials at the real estate investment trust said the feature has been well received by AAA investors, Fitch Ratings warned late last week that it introduces some risks to deals. The stop-advance feature being used by Redwood prevents servicers from providing advances of principal and interest on loans that are 120+ days delinquent. The feature was first used on the $356.45 million deal Redwood issued in April and is set to be included in a pending $343.21 million jumbo MBS from the issuer. Fitch didn’t rate...


June 18, 2015 - Inside Mortgage Finance

More Equity Regained in Early 2015, But Many Underwater Homeowners Face Daunting Odds

Although the negative-equity rate declined in the first quarter, more than half of underwater homeowners are far from recovering. A recent report shows more than 4 million homeowners had mortgages that were at least 20 percent more than their home’s value. With little to no chance of homes appreciating by 20 percent anytime soon, those owners would struggle to break even on a sale. This is...


June 12, 2015 - Inside Nonconforming Markets

Subprime Volume Indicators and Performance

A page of subprime and jumbo data.


June 12, 2015 - Inside Nonconforming Markets

Rating Services Update MBS Models

DBRS and Standard & Poor’s separately issued revised criteria for rating non-agency mortgage-backed securities in recent weeks. DBRS will give slightly more credit to jumbo MBS due to strong performance in recent years, while S&P adjusted modeling relating to home price trends. DBRS noted that from 2010 through the end of April, $32.1 billion in jumbo MBS had been issued, with only one deal taking any losses to date, a 0.04 percent loss. “Positive loan attributes ...


June 12, 2015 - Inside Nonconforming Markets

Higher Loan Limit for FHLBank Jumbo Product

Redwood Trust can now acquire jumbo mortgages of up to $1.5 million from members of the Federal Home Loan Banks under the Mortgage Partnership Finance Direct program. That’s more than double the previous limit – $729,750 – and will significantly expand the pool of potential mortgages that Redwood will acquire. Previously, MPF Direct targeted the narrow range of loans with balances between $625,500, which is the current high-cost conforming loan limit, and ...


June 12, 2015 - Inside Nonconforming Markets

Limited Growth Expected for Jumbo MBS

While issuance of jumbo mortgage-backed securities is the strongest it’s been in the aftermath of the financial crisis, industry analysts suggest that it will be years before activity in the non-agency MBS market returns to levels anywhere near what was seen before the financial crisis. “The short-term outlook remains dismal,” said Quincy Tang, a managing director and head of U.S. residential MBS at DBRS. The factors that have limited issuance ...


June 12, 2015 - Inside Nonconforming Markets

Bank Mortgage Holdings Up Sharply In 2015, Led By Jumbo Home Loans

Originations of jumbo mortgages along with retention of some conforming loans helped bank and thrift holdings of first liens grow in the first quarter of 2015, according to a new ranking and analysis by Inside Nonconforming Markets. Banks and thrifts held $1.78 trillion in first liens in portfolio at the end of the quarter, up 0.9 percent compared with the fourth quarter of 2014 and a 2.4 percent increase compared with the first quarter of last year. The portfolios ... [Includes one data chart]


June 12, 2015 - Inside MBS & ABS

Rating Services Prepare to Comply with New Disclosure Requirements from the SEC

Beginning June 15, rating services involved in MBS and ABS will be subject to increased disclosure standards from the Securities and Exchange Commission. Rating services expect to make a number of changes to comply with the final rule that was issued last August, with some concerns about the usefulness of the increased disclosures. The SEC is requiring nationally recognized statistical rating organizations to disclose rating histories, make changes to rating methodologies and disclose details on findings by third-party due diligence providers, among other issues. Moody’s Investors Service noted...


June 12, 2015 - Inside MBS & ABS

Mortgage Securitization Rate Remains Soft in Early 2015; MBS Get Slightly Bigger Share of Jumbos

Securitization rates for newly originated home mortgages remained at historically low levels during the first quarter of 2015, according to a new Inside MBS & ABS market analysis. The ratio of new MBS issuance to primary-market mortgage originations was just 71.6 percent during the first quarter. That’s down from 75.4 percent for all of last year and the record high of 88.8 percent back in 2009. The slowdown in securitization rates is...[Includes one data table]


June 5, 2015 - Inside The GSEs

Redwood Loan Limits Raised for FHLB Jumbo Loan Program

After a pilot jumbo mortgage loan program between the Federal Home Loan Bank of Chicago and Redwood Trust kicked off this quarter and expanded into a full roll-out beginning June 1, it was announced this week that the loan limit will just about double. The new single-family loan limit for the Mortgage Partnership Finance Direct program will increase from the current $729,750 to $1.5 million in the third quarter. The MPF Direct loan limit was raised primarily to help members that operate in urban or other areas where home prices are higher than the national average, said John Stocchetti, an executive vice president at the FHLB Chicago and group head of the MPF program.


June 5, 2015 - Inside MBS & ABS

Dismal Short-Term Outlook for Prime Jumbo Market But Some Optimism in the Long Term, Says DBRS

The dreary state of the prime jumbo mortgage securitization market will continue for the short term but there’s a silver lining around the bend, according to an analysis by rating agency DBRS. Despite last year’s downturn, the jumbo prime market has seen steady growth in the last five years. In 2010, Sequoia Mortgage ended the drought in the non-agency MBS with a $478.1 million deal backed by newly originated prime jumbo loans. There have been...


June 5, 2015 - Inside MBS & ABS

Redwood’s Agreement with Federal Home Loan Banks Gets Higher Loan Limit, Prospects for Volume Unclear

The loan limit more than doubled for the Mortgage Partnership Finance program through which members of certain Federal Home Loan Banks can deliver jumbos to Redwood Trust. Officials at both the Federal Home Loan Bank of Chicago and Redwood are optimistic about the MPF Direct product, though it’s unclear how much volume the new offering will generate. Beginning in the third quarter, the loan limit for MPF Direct will increase from $729,750 to $1.5 million. Previously, the MPF Direct product targeted loans with balances between $625,500, which is the current conforming loan limit for certain high-cost areas, and $729,750, which was the high-cost loan limit during a time when the FHLBank of Chicago was working to launch MPF Direct. Outside of MPF Direct, Redwood purchases...


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...


Poll

A lot has been written about the ‘Millennial Generation’ being key to the future of the housing/mortgage market, but how much of your mortgage workforce includes Millennials – those born roughly between the years 1980 to 1999?

Less than 10 percent
11 to 30 percent
Greater than 30 percent
It’s so small we can’t even measure it.
We’re tired of reading about how important Millennials are…

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