Jumbo Mortgages

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

July 11, 2014 - Inside MBS & ABS

Redwood’s Includes Non-QMs in Its Latest Jumbo Deal, Does Less than 100 Percent Due Diligence

Redwood Trust took three months off from issuing jumbo MBS but came back with something of a doozy this week: a $306.05 million deal that will include some loans that don’t meet standards for qualified mortgages and some loans that weren’t subject to third-party due diligence reviews. Sequoia Mortgage Trust 2014-2 is set to receive AAA ratings with credit enhancement of 7.57 percent on the top-rated tranche. While the credit enhancement requirements are somewhat high, a jumbo MBS from Redwood in November had even higher credit enhancement levels, suggesting that the non-QMs and lack of full due diligence aren’t a major concern. Only three of the 438 mortgages to be included in the deal are...


July 3, 2014 - Inside MBS & ABS

New Residential MBS Issuance Gathered Momentum During Second Quarter; Non-Agency Sector Faltered

Agency issuance of single-family MBS rallied during the second quarter of 2014, offsetting a slump in production of non-agency MBS and non-mortgage ABS, according to a new market analysis by Inside MBS & ABS. Fannie Mae, Freddie Mac and Ginnie Mae combined to produce $212.23 billion of single-family MBS during the April-to-June cycle. That was up 13.3 percent from the first three months of 2014, which was the weakest quarter for agency MBS production since the first quarter of 2001. On a year-to-date basis, agency MBS issuance was...[Includes two data charts]


July 3, 2014 - Inside FHA Lending

FHA Lenders Raise Production Numbers in April

FHA lenders reported a significant increase in the number of FHA-insured loans originated in April, breaking a downward production spiral that began in the third quarter of last year. Whether this marks a turnaround for the market, however, is uncertain. April closed with $10.3 billion in total FHA originations, up 18.5 percent from March but down 51.7 percent from the same period a year ago. This surge in FHA financing occurred despite the rising costs of obtaining an FHA loans and access-to-credit issues, which have narrowed the gap between FHA and conventional loans with private mortgage insurance. Spring and Fall are the busiest times of year for home sales which might explain the spike, according to real estate agents. FHA fixed-rate mortgages comprised 95 percent of April’s production, with purchase loans accounting for 78 percent of loans originated during the month. FHA lending trends, however, show ... [2 charts]


July 3, 2014 - Inside Nonconforming Markets

Subprime Volume Indicators and Performance

A page of subprime and jumbo data.


July 3, 2014 - Inside Nonconforming Markets

Concerns About New Jumbo MBS Lenders

The new lenders contributing to jumbo mortgage-backed securities could pose risks to investors in the deals, according to Standard & Poor’s. The rating service said that due diligence and strong underwriting standards currently mitigate the risks, but there are concerns that the lenders with limited track records won’t be able to fulfill representation-and-warranty repurchase obligations. Jumbo MBS have seen contributions from a mix of lenders. The main contributors ...


July 3, 2014 - Inside Nonconforming Markets

Chase Issues Jumbo MBS with 15-Year Loans

JPMorgan Chase issued a $303.75 million jumbo mortgage-backed security last week backed by 15-year fixed-rate mortgages. The deal suggests that there is some viability in securitization as the loans included in the deal were suitable to be held in bank portfolios and in fact were mostly originated by banks. First Republic Bank accounted for 55.1 percent of the contributions to J.P. Morgan Mortgage Trust 2014-2 followed by Chase itself with a ...


July 3, 2014 - Inside Nonconforming Markets

Jumbo MBS Issuance Falls in Second Quarter

A spike in issuance of jumbo mortgage-backed securities in the last days of the second quarter of 2014 wasn’t enough to boost issuance to the meager levels seen in the previous quarter, according to a new ranking and analysis by Inside Nonconforming Markets. Some $1.25 billion in jumbo MBS were issued in the second quarter, a 24.9 percent decline from the previous quarter. Four issuers brought deals to the market during the quarter ... [Includes one data chart]


July 3, 2014 - Inside Nonconforming Markets

Treasury Seeks Feedback in Effort To Boost Non-Agency MBS Issuance

The Treasury Department issued a wide-ranging request for comments last week as part of an effort to increase issuance of non-agency mortgage-backed securities. Treasury officials said they are working toward developing standards and practices for the non-agency MBS market. “The private-label securities market has been dormant since the financial crisis,” said Treasury Secretary Jacob Lew. “The fact is, we need to attract more private capital to the housing market ...


June 27, 2014 - Inside MBS & ABS

Securitization Rate Slipped in Early 2014 Despite Backlog Pushing Through Fannie and Freddie

About $179.6 billion of newly-originated home mortgages were securitized during the first quarter of 2014, resulting in a securitization rate of 76.4 percent, according to a new Inside MBS & ABS market analysis. The securitization rate was down slightly from 78.5 percent for all of last year and 78.8 percent during the fourth quarter. Historically, the rate peaked in 2009, when 84.4 percent of new originations were securitized. In the conventional conforming market, Fannie Mae and Freddie Mac securitization volume ($126.4 billion) actually exceeded...[Includes one data chart]


June 27, 2014 - Inside MBS & ABS

Activity Heats Up in the Jumbo MBS Market, But Key Factors Likely to Suppress Issuance

The jumbo MBS market sprung to life this month, just before the close of the second quarter. Three firms are scheduled to issue jumbo MBS at the end of this week, and the market’s biggest player, Redwood Trust, is close to its first new issuance since pricing a deal at the end of March. While jumbo mortgage securitization is currently attractive to issuers, industry analysts suggest that volume will remain limited this year due to a number of factors, including a lack of strong demand from a wide range of investors, incentives for banks to hold jumbos in portfolio and continued dominance by the government-sponsored enterprises. “I think issuance will remain...


June 20, 2014 - Inside FHA Lending

FHA Jumbo Production Continues Slide in 1Q14

FHA jumbo loan originations fell significantly in the first quarter of 2014 due primarily to higher mortgage insurance premiums and a decrease in the mortgage loan limits, particularly in high-cost areas of the country, according to Inside FHA Lending’s analysis of agency data. FHA lenders reported a meager $2.4 billion in jumbo originations during the first three months of the year, a decrease of 21.2 percent from the previous quarter and down a whopping 55.7 percent from the same period a year ago. Purchase loans accounted for 81.0 percent of new originations while fixed-rate loans comprised 86.8 percent. FHA jumbo loans are those over $417,000 and they comprise a very small slice of the FHA’s overall loan portfolio. Citing FHA data, Brian Chappelle, a mortgage industry consultant, said that of the FHA loans originated in the last 12 months, roughly 11,000 loans were above $500,000, down from ... [ 2 charts]


June 20, 2014 - Inside Nonconforming Markets

Subprime Volume Indicators and Performance

A page of subprime and jumbo data.


June 20, 2014 - Inside Nonconforming Markets

Transfer Prompts Delinquencies on Redwood Deal

Delinquencies on the $347 million jumbo mortgage-backed security Redwood Trust issued in April spiked recently to 3.37 percent. That’s the highest delinquency rate seen on any jumbo MBS issued since 2010. However, Fitch Ratings said the spike was an aberration, caused by a servicing transfer, not sudden poor performance by pristine jumbo borrowers. “Early delinquency related to servicing transfers in recent residential MBS is typically due to ...


June 20, 2014 - Inside Nonconforming Markets

Mixed Outlook for Non-Agency MBS Market

Two firms plan to issue jumbo mortgage-backed securities next week, breaking a seven-week lull in issuance. However, jumbo MBS activity is expected to remain suppressed due to a number of factors, including dominance by the government-sponsored enterprises. “The idea that reform of the GSEs could pave the way for the private market’s return seems to have faded,” according to analysts at Standard & Poor’s. The rating service pointed to moves by ...


June 20, 2014 - Inside Nonconforming Markets

Redwood to Source Jumbos Through FHLBanks

Redwood Trust could boost its jumbo acquisitions by $5.0 billion a year, according to industry analysts, due to a new partnership with the Federal Home Loan Bank of Chicago. The real estate investment trust announced last week that it has an exclusive three-year deal to purchase “high balance” mortgages from FHLBank members participating in a new product under the Mortgage Partnership Finance Program. Under the new MPF Direct, members of an ...


June 20, 2014 - Inside Nonconforming Markets

Citi Taps Brokers for its Latest Jumbo MBS

CitiMortgage is preparing to issue its first jumbo mortgage-backed security of the year, a $217.99 million deal largely backed by mortgages originated by brokers. The top contributors to Citigroup Mortgage Loan Trust 2014-J1 are Stearns Lending (33.5 percent), Nationstar Mortgage (30.3 percent) and Freedom Mortgage (11.3 percent). The deal is set to receive AAA ratings from DBRS and Fitch Ratings with credit enhancement of 9.525 percent on the super-senior tranche ...


June 20, 2014 - Inside Nonconforming Markets

WinWater to Issue Its First Jumbo MBS

WinWater Home Mortgage, a relatively new jumbo conduit, is preparing to issue a $249.47 million jumbo mortgage-backed security. The deal is set to receive AAA ratings from DBRS, Kroll Bond Rating Agency and Standard & Poor’s despite concerns about the lack of performance data for WinWater and the firm’s “limited financial capacity.” WinWater is partly owned by principals of Premium Point Investments, a residential mortgage investment advisor ...


June 20, 2014 - Inside Nonconforming Markets

Appetite for Jumbos Prompting Increased Portfolio Holdings for Some Top Lenders

Several top-tier commercial banks increased their holdings of first-lien mortgages during the first quarter of 2014, according to a new ranking and analysis by Inside Nonconforming Markets. The growing portfolios were largely due to jumbo mortgages along with some conforming loans. Banks and thrifts held $1.74 trillion in first-lien mortgages in portfolio at the end of the first quarter of 2014, down 0.7 percent from the previous quarter ... [Includes one data chart]


June 20, 2014 - Inside MBS & ABS

ATR/QM Rule, Better Diligence, Higher Appraisal Standards Will Improve Credit Quality of Future MBS

Major post-crisis changes in the mortgage market should boost new issuance of residential MBS and have a long-lasting, positive impact on credit, according to Moody’s Investors Service. The rating service cites three key developments that will continue to support a strong credit environment for new MBS issuance, starting with the final rule on ability to repay and qualified mortgages. Moody’s believes the rule will help MBS performance by improving the reliability and accuracy of data lenders use to underwrite loans. Under the ATR rules, lenders are required...


June 20, 2014 - Inside MBS & ABS

With Funding From Leon Black, AmeriHome Targets Jumbo And Non-Agency Sector; Its Ultimate Goal is to Securitize

Six months ago, AmeriHome Mortgage of California was a little known subsidiary of Impac Mortgage Holdings. But not anymore. Now controlled by Athene Holding Ltd., an insurance company owned by Wall Street veteran Leon Black, the nonbank lender is gearing up to make a splash in the jumbo and non-agency market as a correspondent buyer of mortgages. “They’re...


June 20, 2014 - Inside MBS & ABS

Redwood Partners with FHLBank MPF Program to Source Jumbos from Banks

Redwood Trust late last week struck a deal with the Federal Home Loan Bank of Chicago to purchase fixed-rate jumbo mortgages from FHLBank members participating in the Mortgage Partnership Finance Program. Redwood will be the sole investor in “high balance” mortgages from the new MPF Direct program for three years. The program is subject to final approval from the Federal Housing Finance Agency. Officials at Redwood said the real estate investment trust plans to start investing in MPF Direct loans during the second half of this year. The loan limit for the MPF Direct program is...


June 13, 2014 - Inside The GSEs

Redwood Inks Three-Year Jumbo Purchase Agreement with FHLBs

Redwood Trust late this week unveiled a three-year agreement with the Federal Home Loan Bank of Chicago whereby the real estate investment trust will purchase residential “high balance” loans from any member of the entire FHLBank system. The loans will be originated by members of the FHLBank system. Those lenders will then sell the mortgages to the Chicago FHLBank as part of the Mortgage Partnership Finance Program, which will then upstream the product to Redwood. The loans will have balances above the Fannie Mae/Freddie Mac loan limit of $625,500.


June 12, 2014 - Inside MBS & ABS

Loaded with Wall Street Veterans, WinWater Readies First Jumbo MBS Deal; An Eye on Nonprime?

WinWater Home Mortgage, a New York-based conduit managed by several Wall Street veterans, is ready to market its first jumbo MBS, but has also made inquiries about non-prime transactions as well, according to traders and lenders familiar with the company. WinWater plans to issue a $249.47 million jumbo MBS, according to a presale report released late this week by Kroll Bond Rating Agency. Not only is the bond WinWater’s first deal, it represents the first new issuance in the sector since late April when Credit Suisse came to market. The average combined loan-to-value ratio on the deal is...


June 12, 2014 - Inside Mortgage Finance

‘Agency Jumbo’ Mortgage Originations Down Sharply in Early 2014, Further Declines Ahead

Production of “agency jumbo” mortgages fell sharply in the first quarter of 2014 and is likely to drop even more as new FHA loan limits show up in endorsement data. According to a new Inside Mortgage Finance analysis, Fannie Mae, Freddie Mac and the FHA saw $10.5 billion in single-family business with loan amounts exceeding the traditional agency limit of $417,000 during the first quarter of 2014. That was down 30.6 percent from the fourth quarter. It was also the lowest three-month volume since the fourth quarter of 2008, not long after dramatically higher “emergency” loan limits were put in place by the agencies. In comparison, originations of non-agency jumbo loans fell...[Includes three data charts]


June 6, 2014 - Inside Nonconforming Markets

Subprime Volume Indicators and Performance

A page of subprime and jumbo data.


June 6, 2014 - Inside Nonconforming Markets

Non-QMs Currently a Niche Portfolio Product

Lenders that dabble in loans that don’t pass the qualified-mortgage test are going to be very selective about which borrowers they accept, and the loans are most likely to be held in portfolio, according to speakers at a recent industry conference in New York City. “We have used our balance sheet to retain non-QM loans in certain situations,” said Russell Brady, an assistant vice president at Elevations Credit Union. “This can make sense, but you have to do it in a controlled way with all the controls in place,” he said during a panel at the Secondary Market Conference sponsored by the Mortgage Bankers Association. The QM limit of 43 percent on debt-to-income ratio is...


June 6, 2014 - Inside Nonconforming Markets

Jumbo Originations Tumble in Early 2014 Even as Lenders Compete for Borrowers

Strong appetite from lenders for jumbo mortgages wasn’t enough to overcome the overall decline in mortgage production in the first quarter of 2014. Jumbo originations declined by 21.4 percent compared with the fourth quarter of 2013, according to a new ranking and analysis by Inside Nonconforming Markets. And the estimated $44.0 billion in jumbos originated in the first quarter was down by 31.3 percent compared with the same period in 2013. The non-agency jumbo sector has gained some market share during that time as overall production has declined even more. Jumbos accounted for 18.7 percent of total originations in the first quarter of 2014, a level not seen since 2004. Wells Fargo remained...[Includes one data chart]


May 30, 2014 - Inside MBS & ABS

Single-Family Rental Securitization Market Expected To Thrive With Plenty of Demand from Investors

The market for securities backed by proceeds from single-family rental properties is set to grow from deals backed by a single firm to pools with multiple sponsors, according to industry analysts. The sector has produced more volume than the jumbo MBS market in recent months and investor demand for single-family rental securities remains strong. Rating services are projecting that single-family rental securities soon will come to market with multiple sponsors or borrowers in a single security. Kroll Bond Rating Agency released...


May 30, 2014 - Inside MBS & ABS

RBS Securities Cutting Back on MBS Trading Business, Other Foreign Banks May Follow Suit

RBS Securities – which is 64 percent owned by the government of the United Kingdom – is shaking up its mortgage trading operation in the U.S., cutting staff and taking a close look at its future in an extremely tough American mortgage market. Officials at the bank’s MBS headquarters in Stamford, CT, did not return telephone calls about the matter, but several lenders and Wall Street executives confirmed that cutbacks have been made at the company over the past week or so. Frank Skibo, a managing director for RBS in Connecticut, and Ara Balabanian, a director in the group, also could not be reached...


Poll

Will non-QM lending add to loan production by 2015?

Yes, but not by much.
Yes, by a lot. Necessity is the mother of invention.
No way. You’re dreaming.
I’m hopeful, but unsure of the whole non-QM market.

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