Browse articles from all of our Newsletters related to Nonconforming.

October 27, 2016 - IMFnews

Short Takes: Will Ocwen See $60 a Share Again? / Challenges Remain / Ocwen’s Shrinking Employee Base / LPMI Competition Reduced? / Alterra Hires Former Prospect Executive Murray

Ocwen had an average of 7,484 employees in the third quarter of 2016, down 12.3 percent from 3Q15...

October 27, 2016 - IMFnews

Ocwen Finally Earns a Profit; Stock Soars; Questions Remain

Ocwen funded $1.2 billion in “forward” mortgages and an additional $213 million of reverse loans. In 2Q16 it funded $1.32 billion.

October 24, 2016 - IMFnews

Retail Channel was Dominant Source of Jumbos in First Half

Jumbo lending has a much more retail focus: the vast majority of loans are originated for portfolio or, in the case of non-depositories, sale to a bank or other portfolio investor.

October 21, 2016 - Inside Nonconforming Markets

Average Jumbo Mortgage Interest Rates and Mortgage Performance

A page of jumbo data and the performance of non-agency mortgage-backed securities.

October 21, 2016 - Inside Nonconforming Markets

Portfolio Lenders Avoid Layering of Risk

The underlying theme of portfolio lending is the ability to use compensating factors in underwriting a mortgage, said analysts at MIAC Analytics in a recent web posting. Portfolio lenders, many of them community bankers, have figured out to how to find profitable opportunities in the mortgage niches that don’t work in the agency market, MIAC said. Often, these are consumers who were left out of the housing recovery because of the sharp decline in capital available in the non-agency market, they added. Typically, they don’t...

October 21, 2016 - Inside Nonconforming Markets

Jumbo Share Nudged Slightly Higher in 2015

Jumbo mortgages accounted for 18.3 percent of total first-lien originations in 2015, according to a new Inside Mortgage Finance analysis of Home Mortgage Disclosure Act data recently released by federal regulators. That was virtually unchanged from the 18.1 percent share that jumbo loans held in the 2014 HMDA data. The analyses match conventional loan amounts and county information about the secured property to Fannie Mae/Freddie Mac conforming loan limits, including adjustments for high-cost markets, in effect at the time. Purchase mortgages accounted...[Includes two data tables]

October 21, 2016 - Inside Nonconforming Markets

LO Apathy Holding Back Non-QM Volume

Industry participants looking to originate non-qualified mortgages or acquire the loans continue to insist that the relatively low volume of such loans is due to a lack of effort from lenders. “It’s not that the non-QM space is competing for borrowers that are getting loans elsewhere, it’s that the non-QM space is competing for origination capacity at existing originators,” said Matt Nichols, CEO of Deephaven Mortgage. Many have placed...

October 21, 2016 - Inside Nonconforming Markets

Some Variety in New Jumbo MBS from Redwood

The latest jumbo mortgage-backed security from Redwood Trust includes some differences compared with the two jumbo MBS the firm issued earlier this year. The $343.16 million deal includes loans from many lenders and contributions from a Federal Home Loan Bank program. Sequoia Mortgage Trust 2016-3 received preliminary AAA ratings from Kroll Bond Rating Agency and Moody’s Investors Service. The MBS will include...

October 21, 2016 - Inside Nonconforming Markets

Retail Channel Is Dominant Source Of Jumbo Mortgages in Early 2016

The jumbo market is dominated by retail lenders to a greater extent than either conventional-conforming production or government-insured lending, according to a new analysis by Inside Nonconforming Markets. A group of 19 top jumbo lenders reported $92.45 billion in jumbo originations through their retail operations during the first half of 2016. That represented 76.8 percent of the $120.37 billion in total jumbo production for the group. The 19 lenders accounted...[Includes one data table]

October 20, 2016 - IMFnews

The Clayton ‘Revolving Door’ Continues. A Goodwill Charge for Radian?

One mortgage CEO who has been contacted by Wornow said he’s in the process of starting his own capital markets company.

October 17, 2016 - IMFnews

Does Default Servicing Have Much of a Future?

Some good news for default servicing: For all the loans that are out there, there will always be excessive debt, illness, divorce, unemployment, or some other disruptive factor, noted one expert.

October 13, 2016 - IMFnews

Sales of Higher-Priced Mortgages Declined in 2015

Higher-priced mortgages are sometimes seen as a proxy for nonprime mortgages...

October 11, 2016 - IMFnews

Portfolio Retention of ARMs Increased in 2Q16

Wells Fargo was the top ARM lender in the second quarter with $5.76 billion in originations.

October 10, 2016 - IMFnews

In Crafting the Deal Agent Concept for Non-Agency MBS, Investors Looked to the GSEs

Clayton Holdings is one firm that’s interested in providing deal-agent services to the industry…

October 7, 2016 - Inside Nonconforming Markets

Average Jumbo Mortgage Interest Rates and Mortgage Performance

A page of jumbo data and the performance of non-agency mortgage-backed securities.

October 7, 2016 - Inside Nonconforming Markets

News Briefs

The Structured Finance Industry Group is preparing to publish standards that aim to increase transparency for representations and warranties on new non-agency mortgage-backed securities, according to officials at the trade group. Eric Kaplan, a managing partner at Ranieri Strategies, said SFIG will release one or two “green papers” this year as part of the group’s RMBS 3.0 effort to revive issuance of non-agency MBS. He said the next green paper from SFIG will ... [Includes two briefs]

October 7, 2016 - Inside Nonconforming Markets

Non-QMs Subject to Greater Regulatory Risk

Regulatory actions and lawsuits involving non-qualified mortgages have been essentially non-existent since the Consumer Financial Protection Bureau’s ability-to-repay rule took effect at the start of 2014. R. Andrew Arculin, counsel at the Venable law firm, noted that the broader economy has helped keep borrowers performing, limiting foreclosures to this point. “One of the lurking variables that I think people are concerned about is what happens if the market crashes and ...

October 7, 2016 - Inside Nonconforming Markets

Sales of Higher-Priced Mortgages Declined in 2015

Some $41.77 billion in higher-priced mortgages were sold in 2015, down 19.9 percent from 2014, according to an Inside Nonconforming Markets analysis of recently released data under the Home Mortgage Disclosure Act. Their share of total loan sales also decreased in 2015 to 3.3 percent. Higher-priced mortgages are sometimes seen as a proxy for nonprime mortgages. First-lien higher-priced mortgages are defined as loans with an ... [Includes one data chart]

October 7, 2016 - Inside Nonconforming Markets

Servicing Nonprime Non-QMs Takes Extra Effort

While delinquencies on nonprime, non-qualified mortgages originated in recent years have been low, lenders note that servicing these loans requires unique efforts. How borrowers are welcomed by the servicer is seen as particularly important. Daniel Perl, CEO of Citadel Servicing, said Citadel’s borrowers receive three or four phone calls from the servicer within the first 20 days of origination. “We want people to understand that we’re here to help,” Perl said during a recent webinar ...

October 7, 2016 - Inside Nonconforming Markets

Some Conflicts with Deal-Agent Duties

The sample deal-agent agreement released by non-agency industry participants in September aims to provide a template for a third party that would protect investors in future non-agency mortgage-backed securities. Some industry participants warn that there are still more issues that need to be addressed, including a potential overlap in the duties for a deal agent and tasks traditionally handled by trustees and master servicers. At the recent ABS East conference produced by ...

October 7, 2016 - Inside Nonconforming Markets

High Volume at GSEs from Non-Agency-Like Loans

Special treatment for the government-sponsored enterprises regarding debt-to-income ratios on qualified mortgages and “emergency” high-cost loan limits accounted for about 25.0 percent of the single-family business that passed through the GSEs in the first half of 2016, according to an analysis by affiliated publication Inside The GSEs. In the first six months of 2016, Fannie Mae and Freddie Mac securitized $64.52 billion of single-family mortgages with DTI ratios ...

October 7, 2016 - Inside Nonconforming Markets

Portfolio Retention of ARMs Increased in 2Q16

The share of adjustable-rate mortgages held in portfolio hit an exceptionally high level in the second quarter of 2016, according to a new analysis by Inside Nonconforming Markets. An estimated $53.00 billion in ARMs were originated in the second quarter of 2016 and $4.69 billion in ARMs were included in mortgage-backed securities issued during the period. The ARM securitization rate in the second quarter was 8.8 percent, down from 13.9 percent ... [Includes two data charts]

October 7, 2016 - IMFnews

What We’re Hearing: The Best Place for an LO? Answer: At a Nonbank / How Wells Fargo Grades its LOs / Remember FM Watch? / Jump? How High? / Pingora Continues to Buy MSRs / The Revolving Door at Clayton / Wornow and Hughes Land

Want to make more money? Go work for a nonbank. Want better job security? Work for a depository...

October 7, 2016 - Inside Nonconforming Markets

At the End of 3Q16, Only Two Firms Still Issuing Prime Non-Agency MBS

JPMorgan Chase and Redwood Trust remained the only two active issuers of prime non-agency mortgage-backed securities as of the end of the third quarter of 2016, according to a new ranking and analysis by Inside Nonconforming Markets. A total of $4.07 billion in prime non-agency MBS was issued during the third quarter of 2016, more than five times the volume issued in the previous quarter. However, through three quarters this year, prime MBS issuance ... [Includes one data chart]

October 7, 2016 - IMFnews

Redwood Set to Issue Third Jumbo MBS of the Year; New Bond Includes FHLB Loans

On average, the loans have seasoned just 1.9 months, one of the fastest turn times for a jumbo MBS in recent years…

October 7, 2016 - IMFnews

A Minor ‘Realignment’ at Clayton Holdings: Pollock Named Chief Revenue Officer; Capital Markets Chief Wornow Out

Radian agreed to buy Clayton in May 2014 for $305 million.

October 6, 2016 - IMFnews

Short Takes: PHH and Caliber, Again? / Will Analysts Grill Wells Fargo? / Walter Exec Sells Shares / RBS Agrees to Settle MBS Case with Connecticut / New Hires for Compass Point

Is Caliber once again dancing with PHH?

October 3, 2016 - IMFnews

Non-QM Liquidity Has Arrived; Warehouse Lenders On Board Too

Angel Oak said more warehouse banks are growing comfortable with non-QM collateral…

September 29, 2016 - IMFnews

Will the Wells Fargo Account Scandal Hit the Megabank’s Mortgage Business? Correspondent Sellers Fear ‘Reputational’ Risk

Meanwhile, other lenders said they are hearing reports of correspondent originators slowing down the sale of closed loans to Wells.

September 28, 2016 - IMFnews

Redwood CEO: JPMorgan ‘Ahead of Everybody Else’ with Non-Agency MBS Packed with GSE-Eligible Loans

The Redwood CEO said the MBS offer a number of benefits to Chase, including effectively cutting the guaranty fee…

September 26, 2016 - IMFnews

MBA Task Force Proposes Standardized Loan Mod Program to Replace HAMP

The task force consists of 20 MBA member companies, led by Alex McGillis of Quicken Loans and Erik Schmitt of JPMorgan Chase.

September 26, 2016 - IMFnews

Interest-Only Originations Spiked 45 Percent in 2Q; PHH Mortgage a Standout

Morgan Stanley was offering a 5/1 IO ARM with an interest rate of 3.850 percent for loan amounts below $1 million…

September 23, 2016 - Inside Nonconforming Markets

Subprime Volume Indicators and Performance

A page of subprime and jumbo data.

September 23, 2016 - Inside Nonconforming Markets

News Briefs

CORRECTION: Redwood Trust’s Choice program doesn’t allow for stated-income documentation, as originally reported in the Sept. 9, 2016, issue of Inside Nonconforming Markets. And Redwood does allow underwriting exceptions for Choice mortgages, a change that was made after the program was introduced. The baseline conforming loan limit for Fannie Mae and Freddie Mac will likely go up to about $422,000 in 2017, according to an Inside ... [Includes four briefs]

September 23, 2016 - Inside Nonconforming Markets

Ocwen Dominates Initial Streamline HAMP Mods

Ocwen Financial accounted for slightly more than half of the modifications completed under the new Streamline Home Affordable Modification Program offering, according to the company. Streamline HAMP mods are only available for non-agency mortgages. The program is aimed at borrowers who meet general HAMP eligibility criteria but haven’t completed a loan mod application by the time their loan is 90 days delinquent. It’s streamlined in that no income documentation is ...

September 23, 2016 - Inside Nonconforming Markets

No Delinquencies on Sterling Bank-Statement Loans

Sterling Bank & Trust does limited income documentation under its bank statement program but the bank said there have been zero delinquencies on the nearly $1.00 billion in such loans the bank has funded in the past five years. Some $33.2 million in loans from Sterling’s Advantage Home Ownership Program were included in the $217.0 million non-agency mortgage-backed security issued by Lone Star Funds last week. Rating reports on the MBS by DBRS and Fitch Ratings provided ...

September 23, 2016 - Inside Nonconforming Markets

Non-QM Lenders See Plenty of Room for Growth

Originations of non-qualified mortgages could reach $100.0 billion a year, according to officials at three prominent nonprime lenders. Since QM standards from the Consumer Financial Protection Bureau took effect at the start of 2014, non-QMs such as jumbo mortgages with interest-only terms have predominantly gone to affluent borrowers. However, officials at Angel Oak Mortgage Solutions, Deephaven Mortgage and Citadel Servicing see promise in originations for ...

September 23, 2016 - Inside Nonconforming Markets

Sample Deal-Agent Agreement Drafted for MBS

An investor-led group of participants in the non-agency mortgage-backed security market released a sample deal-agent agreement last week. The investors said the agreement can help reform non-agency MBS practices and increase issuance. Some investors have balked at buying new non-agency MBS until significant reforms are put in place. As early as July 2008, the American Securitization Forum started work on reforming the market and the Structured Finance Industry Group ...

September 23, 2016 - Inside Nonconforming Markets

Improved Pricing on Latest Nonprime MBS

The nonprime mortgage-backed security issued last week by Lone Star Funds priced at tighter spreads than the deal the company issued in June, indicating increased demand among investors. The $217.00 million COLT 2016-2 was also larger than the previous $161.40 million deal from Lone Star. According to Deutsche Bank Securities, spreads of A-1 tranche and A-2 tranche in COLT 2016-2 were respectively priced at 130 basis points and 175 bps, significantly tighter than ...

September 23, 2016 - Inside Nonconforming Markets

IO Originations Increase in 2Q, Led by PHH

Originations of interest-only mortgages increased significantly in the second quarter of 2016, particularly at PHH Mortgage, according to a new ranking by Inside Nonconforming Markets. A group of 12 lenders had $12.65 billion in IO originations in the second quarter, up 44.7 percent compared with the previous quarter. A large amount of the increase in volume was driven by PHH, which more than doubled its IO originations in that span. PHH had $6.25 billion ... [Includes one data chart]

September 23, 2016 - Inside Nonconforming Markets

Jumbo MBS Issuance Picks Up With Chase Deal; Strong Demand for Whole-Loan Sales

JPMorgan Chase is set to end another lull in the issuance of jumbo mortgage-backed securities. The $395.40 million JPMorgan Mortgage Trust 2016-3 is scheduled to be issued next week, according to a presale report from Fitch Ratings. The most recently issued jumbo MBS priced in mid-August and was also from Chase. Only two firms with active conduits have issued jumbo MBS this year: Chase and Redwood Trust. Two Harbors Investment and WinWater Home Mortgage issued ...

September 23, 2016 - IMFnews

The New Breed of Nonprime Lenders See Plenty of Room for Growth

Tom Hutchens, SVP of sales and marketing at Angel Oak, said originations of nonprime non-QMs have predominantly been purchase mortgages. However, refinance activity is starting to increase…

September 22, 2016 - IMFnews

SEC Charges Against Hedge Fund Chief Include Allegations Tied to Altisource Investment

Altisource’s stock price declined by 6.4 percent to $30.77 per share shortly after the charges were announced, but the stock has rebounded somewhat…

September 20, 2016 - IMFnews

Short Takes: The Wells Fargo Senate Barbeque / The Scandal’s Effect on Wells’ Mortgage Business? / Hats Off to the Los Angeles Times / Sen. Warren Slams Stumpf / Jumbo Update

Will a potential residential mortgage customer bolt Wells Fargo because they can’t trust the bank’s employees, including its retail loan officers?

September 20, 2016 - IMFnews

JPM Prepares Another Jumbo MBS, First Deal in More than a Month

Despite improvement in securitization returns, jumbo whole loan sales are still more profitable, KBW said.

September 19, 2016 - IMFnews

Deal Agent Concept for Non-Agency MBS Closer to Reality with Release of Sample Document

However, the sample deal agent agreement doesn’t address one of the remaining controversial issues: how much to pay for their services.

September 16, 2016 - IMFnews

What We’re Hearing: How Much Will the Brits Wind Up Paying the FHFA? / Maybe Elton and McCartney Can Help / Remember Lehman Brothers? / What Will Donald Trump do with Fannie Mae and Freddie Mac? / JPM Promotes Three

And since RBS is essentially owned by the British government, any settlement money will indirectly come from U.K. taxpayers. Who knows, maybe Adele, Paul McCartney and Elton John can chip in…

September 16, 2016 - IMFnews

Impac Prices ‘Add-on’ Offering of Stock at $13 a Share; Stock Gets Smacked

Impac presently has a market capitalization rate (stock price multiplied by number of shares) of $167.6 million.

September 16, 2016 - IMFnews

Guess Who Benefits from a Rate Rise? Answer: Nonprime Lenders

What’s the market potential for nonprime/non-QM lending? Maybe $100 billion a year…

September 16, 2016 - IMFnews

Bank Holdings of Non-Mortgage ABS Declined Again in 2Q16; Market Grew Slightly

Banks held about 18.6 percent of total ABS outstanding.


After the November elections, how long will it take for a new Congress and White House to pass GSE reform legislation?

I’m confident a bill will be passed the first year.


2 to 3 years. GSE reform is complicated.


Sadly it won’t happen in a Clinton or Trump first term.


Not in my lifetime.


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