Jumbo Mortgages

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

December 19, 2014 - Inside FHA Lending

FHA Jumbo Originations Surge in 3Q14

Production of FHA-insured jumbo loans ballooned in the third quarter of 2014 reflecting heightened activity in this loan segment during the period. A 23.7 percent quarter-over-quarter surge helped push FHA jumbo lenders’ total volume to $7.71 billion at the end of the nine-month period ending Sept. 30. It was a significant increase for a segment that represents only a sliver of FHA’s overall business. However, compared to last year’s first nine months, volume was down by almost half (48.8 percent) as lenders struggled to keep pace with last year’s output. Strong purchase demand helped drive FHA jumbo originations (all FHA loans over $417,000 up to $625,500 in high-cost areas), as purchase mortgages accounted for 81.1 percent of all FHA jumbos originated during the first nine months of the year. Fixed-rates comprised 86.4 percent of FHA jumbos originated during ... [1 chart]


December 19, 2014 - Inside Nonconforming Markets

Subprime Volume Indicators and Performance

A page of subprime and jumbo data.


December 19, 2014 - Inside Nonconforming Markets

News Briefs

Credit Suisse appears to be close to issuing a jumbo mortgage-backed security with some loans sourced from Five Oaks Investment. Stonegate Mortgage announced an expansion of its offerings of non-agency mortgage products last week. The lender is offering adjustable-rate mortgages with loan-to-value ratios as high as 90 percent and no requirement for mortgage insurance. The loans can have balances as high as the conforming loan limit ... [Includes three briefs]


December 19, 2014 - Inside Nonconforming Markets

Cenlar Seen as a Strong Servicer of Jumbo MBS

A savings bank that focuses on subservicing has been the most active servicer of loans in jumbo mortgage-backed securities since 2013, according to Fitch Ratings. A number of rating services view the firm, Cenlar, as a strong servicer with good prospects for continued growth. Last week Fitch affirmed its RPS2 rating for Cenlar as a servicer of prime mortgages that demonstrates “high performance in overall servicing ability.” Fitch said that since 2013, Cenlar has added ...


December 19, 2014 - Inside Nonconforming Markets

Banks Increase Holdings of First Liens

Bank and thrift holdings of first-lien mortgages increased in the third quarter of 2014 compared with the third quarter of 2013, according to a new ranking and analysis by Inside Nonconforming Markets. Banks and thrifts held $1.76 trillion in first liens as of the end of the third quarter of 2014, up 0.4 percent compared with the same period last year. The growth was driven by jumbo mortgages. On a quarterly basis, portfolio runoff and loan sales slightly outpaced ... [Includes one data chart]


December 19, 2014 - Inside Nonconforming Markets

Field of Jumbo MBS Issuers Growing, Attracting Investors Still a Problem

The number of issuers offering jumbo mortgage-backed securities will increase in 2015, according to analysts at various rating services, but total issuance volume isn’t expected to grow by much compared with this year. Attracting investors willing to purchase AAA tranches of jumbo MBS remains a key obstacle. Some $5.4 billion in jumbo MBS were issued during the first three quarters in 2014, according to Inside Nonconforming Markets, including $3.1 billion in the third quarter ...


December 12, 2014 - Inside MBS & ABS

2015 Looks to Be Another Slog for Non-Agency MBS With More Volatility, Big GSE Footprint

Supporters of the non-agency residential MBS market will have plenty of heavy lifting to do next year, as they face an anticipated increase in volatility for some deals and a continued dominating presence in the broader market by Fannie Mae and Freddie Mac, among a host of challenges. But at least there’s some degree of regulatory certainty for the market now, and it’s likely that opportunities will emerge for savvy investors to snap up some extra yield, according to a consensus of Wall Street analysts who cover the space. Analysts at Fitch Ratings expect to see the continuation of a slow recovery for the non-agency MBS space in 2015. “The recovery in primary U.S. RMBS issuance remains anemic as the industry continues to face challenges including continued government-sponsored enterprise dominance, more attractive financing alternatives such as whole-loan sales, new mortgage regulation, and a weak AAA investor base,” Fitch analysts said in a 2015 outlook piece. Also, despite the industry’s renewed efforts led by the Structured Finance Industry Group to resolve the absence of necessary structural reforms after the financial crisis, progress is...


December 12, 2014 - Inside MBS & ABS

Mortgage Securitization Rates Remain Below Par For Recent Years; More Options for Conforming

Mortgage securitization rates continued to trend lower through the first nine months of 2014 as Fannie Mae and Freddie Mac captured a smaller share of the conventional conforming market. A new Inside MBS & ABS analysis reveals that 70.4 percent of home loans originated during the first nine months of the year were packaged into MBS. For all of 2013, the securitization rate was 78.5 percent, and it reached as high as 84.4 percent in 2009, the first year following the financial meltdown. A key factor is...[Includes one data chart]


December 12, 2014 - Inside MBS & ABS

Mortgage REITs Report Decline in MBS Holdings During 3Q14; Analysts Not Ready to Give Up Yet

Naysayers have been predicting the demise of publicly traded mortgage real estate investment trusts for two years now and have been consistently disappointed. It’s hard to say whether things will be different this time around. According to figures compiled by Inside MBS & ABS, it appears that most REITs have been intentionally reducing their MBS holdings over the past several quarters, preparing for the day when bond prices finally fall. At Sept. 30, 16 publicly traded REITs held...[Includes one data chart]


December 11, 2014 - Inside Mortgage Finance

Jumbo Originations Continued to Shine in 3Q14 With Boost From Agency-Conforming Activity

Jumbo mortgage lending and securitization remained one of the bright spots in the home-loan business during the third quarter of 2014, according to a new Inside Mortgage Finance analysis. A total of $81.8 billion in mortgages exceeding the traditional $417,000 conforming loan limit were produced during the third quarter, up 15.4 percent from the second quarter of 2014. Total mortgage originations were up 11.3 percent over the same period. Total jumbo activity included...[Includes three data charts]


December 5, 2014 - Inside Nonconforming Markets

Subprime Volume Indicators and Performance

A page of subprime and jumbo data.


December 5, 2014 - Inside Nonconforming Markets

Few Delinquencies on New Jumbo MBS

Jumbo mortgage-backed securities issued in recent years continue to perform exceptionally well, according to Moody’s Investors Service. The rating service pointed to 10 jumbo MBS issued in 2012 and 2013 by Redwood Trust as having built up credit enhancement on the senior bonds due to a low level of delinquencies. “An analysis of 10 transactions suggests that the low delinquency rate will continue as a result of the improving housing market, even as prepayment rates have remained low ...


December 5, 2014 - Inside Nonconforming Markets

Jumbo MBS Loses Allure for Chimera

Chimera Investment emerged from years of accounting issues with an ability to return to the new-issue jumbo mortgage-backed security market. However, the real estate investment trust has focused its new investment strategy on agency MBS as well as multifamily activity and a unique restructuring of vintage non-agency MBS. Matthew Lambiase, president and CEO of the real estate investment trust, said the returns offered by new jumbo MBS aren’t currently attractive. “The economics are ...


December 5, 2014 - Inside Nonconforming Markets

MBS Investors Eye Transferring Risk More Fairly

One of the chief concerns among some top institutional investors in the non-agency residential mortgage-backed securities market is coming up with a way to price the risks of poorly underwritten or serviced mortgages more effectively. The objective is to price deals so the costs associated with an origination or servicing failure will be more appropriately assigned to those responsible for the defect. During a recent industry conference, a managing director at ...


December 5, 2014 - Inside Nonconforming Markets

Goldman Returns to Non-Agency MBS Market

Goldman Sachs teamed with EverBank Financial to issue a unique jumbo mortgage-backed security last week, its first jumbo MBS since the financial crisis. The $282.80 million GS Mortgage-Backed Securities Trust 2014-EB1 received AAA ratings with credit enhancement of 8.35 percent on the senior tranche. All of the loans in the deal are hybrid adjustable-rate mortgages originated by EverBank. Some 7.9 percent of the ARMs have a 10-year interest-only period. The deal marked a shift ...


December 5, 2014 - Inside Nonconforming Markets

Jumbo Originations Rose in 3Q14; Bank Demand Remains Strong

Originations of jumbo mortgages increased in the third quarter of 2014 compared with the previous quarter, according to a new ranking and analysis by Inside Mortgage Finance, an affiliated publication. Big banks continue to have a strong appetite for jumbos, prompting some smaller banks to sell jumbos to them and keeping some nonbanks out of the jumbo mortgage-backed security market altogether. An estimated $65.0 billion in jumbos were originated in the third quarter of 2014 ... [Includes one data chart]


December 5, 2014 - Inside MBS & ABS

Half of All Currently Performing Mortgages Backing Non-Agency MBS Set to Experience Payment Shock

The relatively strong performance of mortgages in vintage non-agency MBS could be disrupted by interest rate resets and the expiration of interest-only periods, according to analysts at Fitch Ratings. Roughly half of all performing first-lien mortgages in non-agency MBS will be exposed to monthly payment increases during the next five years, Fitch said in a report released this week. The rating service determined that if a borrower’s monthly payment increases by 35 percent, the probability of default for the borrower doubles. “The product that’s going to be most affected is...


November 26, 2014 - Inside Mortgage Finance

Correspondent Channel Saw Biggest Origination Volume Gains During Third Quarter of 2014

All three mortgage-production channels generated solid increases in new origination volume during the third quarter of 2014, but the correspondent market had a measurably bigger gain, according to a new Inside Mortgage Finance ranking and analysis. An estimated $105 billion of home loans were produced by correspondent originators during the third quarter, up 14.1 percent from the previous quarter. That lifted the correspondent share of new originations to 30.4 percent for the quarter, and 30.3 percent on a year-to-date basis. Correspondents are...[Includes four data charts]


November 21, 2014 - Inside Nonconforming Markets

Subprime Volume Indicators and Performance

A page of subprime and jumbo data.


November 21, 2014 - Inside Nonconforming Markets

News Briefs

The Consumer Financial Protection Bureau proposed new servicing requirements this week. Among other changes, the federal regulator proposed requiring servicers to offer loss mitigation to borrowers that have received a loan mod but are in danger of re-default. The CFPB’s servicing rules currently require a servicer to evaluate a borrower for loss mitigation only once during the life of the loan. The proposed rule would also set requirements for ... [Includes three briefs]


November 21, 2014 - Inside Nonconforming Markets

REITs Tout Non-Agency Benefit of FHLBanks

Prohibiting real estate investment trusts from joining the Federal Home Loan Bank system would hurt efforts to revive the non-agency market, according to two REITs that have gained access to FHLBank financing. Officials at both Two Harbors Investment and Redwood Trust said FHLBank advances helped the REITs fund originations of jumbo mortgages in the third quarter of 2014. Both companies recently gained access to FHLBank advances via captive insurance entities ...


November 21, 2014 - Inside Nonconforming Markets

FirstKey Steps Up as Jumbo MBS Issuer

FirstKey Mortgage, a jumbo conduit indirectly owned by funds managed by Cerberus Capital Management, is set to issue its first jumbo mortgage-backed security. FirstKey ramped up its jumbo activity in the past year and to this point has aggregated loans for inclusion in jumbo MBS from other issuers, including WinWater Home Mortgage, another relatively new jumbo MBS player. The $285.98 million FirstKey Mortgage Trust 2014-1 is set to receive AAA ratings ...


November 21, 2014 - Inside Nonconforming Markets

SFIG Works on Due-Diligence Disclosure Issues

The latest “green papers” in the Structured Finance Industry Group’s RMBS 3.0 standards-setting project focus on due-diligence disclosures for investors in non-agency mortgage-backed securities. The SFIG noted that potential investors in non-agency MBS are particularly interested in findings conducted by third-party due-diligence firms before a security is issued. The SFIG proposed a model form that would disclose an “extract” of due-diligence findings to investors ...


November 21, 2014 - Inside Nonconforming Markets

MBS Investors Seek Protection, Transparency

As leading figures in the secondary market continue their efforts to reboot the non-agency mortgage-backed securities sector, attracting private capital remains the single most critical factor in the equation. However, during a recent industry conference, institutional investors made it clear that in order for them to return, the market’s infrastructure will need to provide stronger protections, enhanced transparency and an improved ability to respond when a deal starts to go sour ...


November 21, 2014 - Inside Nonconforming Markets

Treasury Sees Multiple Sponsors, SFIG Standards in ‘Benchmark’ Jumbo MBS

The benchmark non-agency mortgage-backed security that the Treasury Department is organizing will vary significantly from recent non-agency MBS. Michael Stegman, counselor on housing finance policy to the Treasury, revealed new details about the planned transaction last week in New York City at the Private-Label RMBS Symposium hosted by the Structured Finance Industry Group and Information Management Network. Stegman said the benchmark non-agency MBS will ideally be ...


November 21, 2014 - Inside MBS & ABS

MBS Pioneer Ranieri Active in the Single-Family Rental Space, But With a Twist; Can an MBS Deal Be at Hand?

Home Partners of America, a single-family rental company affiliated with MBS veteran Lewis Ranieri, has been quietly gobbling up homes across the U.S., and may have its eye on tapping the securitization market. “They are very active,” said one associate close to Ranieri, who spoke under the condition his name not be used. Moreover, Home Partners – formerly known as Hyperion Homes LLC – recently received...


November 21, 2014 - Inside MBS & ABS

RMBS Market Optimists See Some Key Positives, But Pessimists Cite Shriveled Levels of Issuance

Top mortgage finance professionals and government officials gathered in New York City last week to discuss the prospects for the non-agency MBS market, and their assessments were all over the board, a sign of the uncertainty many participants have about trying to resuscitate a stagnant sector. “It’s been seven years since the financial crisis, and certainly a lot of things have changed,” said Rui Pereira, managing director at Fitch Ratings, during a panel at the non-agency MBS reform symposium sponsored by the Structured Finance Industry Group and Information Management Network. He then cited...


November 13, 2014 - Inside Mortgage Finance

Mixed Results for Publicly Traded Nonbanks: Ocwen, Walter, PHH in the Dog House; PennyMac and Redwood Show Promise

Although residential lenders are coming off a better than expected production quarter – and enjoying a decent last three months of the year – analysts and investors seem undecided on whether there’s opportunity in the market or it’s time to stay on the sidelines. Several high profile publicly traded shops that are considered “high touch” specialists – Nationstar Mortgage, Ocwen Financial and Walter Investment – continue to trade at steep discounts to their 52-week highs with all three facing possible class-action lawsuits from angry investors who’ve seen billions of dollars in stock equity evaporate over the past year. And then there’s...


November 7, 2014 - Inside Nonconforming Markets

Subprime Volume Indicators and Performance

A page of subprime and jumbo data.


November 7, 2014 - Inside Nonconforming Markets

News Briefs

Ocwen Financial is working on a settlement with the New York Department of Financial Services regarding various servicing-related concerns raised by the state regulator. The $100 million in legal reserves that Ocwen booked in the third quarter of 2014 for a potential settlement is the minimum the company expects to spend, according to William Erbey, Ocwen’s chairman. “I would caution that this does not mean that we have settled with the [NYDFS] ... [Includes two briefs]


November 7, 2014 - Inside Nonconforming Markets

Ocwen Sets Sights on Non-Agency Originations

With growth via acquisitions of servicing portfolios on hold, Ocwen Financial is pursuing a number of different initiatives, including originations of non-agency mortgages. The nonbank primarily known for servicing high-touch mortgages is currently testing originations of jumbo mortgages and working toward originating nonprime mortgages. “The business is building a robust new product pipeline and is currently in the market testing a new jumbo mortgage product,” Michael Bourque ...


November 7, 2014 - Inside Nonconforming Markets

Strong Demand for Jumbo Originations From Both Banks and MBS Investors

Pricing for jumbo mortgage-backed securities has improved in recent months, prompting an increase in issuance from some firms, but bank demand remains robust. “Although the difference has narrowed, our whole-loan sale execution for most jumbo loans continues to be more attractive than our securitization execution as a result of strong demand from banks,” Brett Nicholas, president of Redwood Trust, said this week during a call with investors. In the third quarter of 2014, Redwood issued ...


November 7, 2014 - Inside MBS & ABS

BNYM Looking to Increase its Master Servicing In Non-Agency MBS Market; Wells Dominates

Bank of New York Mellon is looking to increase its master servicing activity on residential mortgages, according to officials at the firm that acquired the master servicing unit from JPMorgan Chase in October 2006. However, BNYM is up against stiff competition, including Wells Fargo, a dominant presence in master servicing for non-agency MBS. BNYM is focusing on growth opportunities from managing new funds in traditional residential mortgages as well as new loan types, according to a recent report by Fitch Ratings. In September, Fitch downgraded BNYM’s master servicer rating due to compliance issues, organizational changes and low activity in recent years. The firm has...


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