Originations of jumbo mortgages increased by 32% in the second quarter while total first-lien originations declined, helping the sector gain market share. Still, the share is below pre-pandemic levels. (Includes data chart.)
The lender curtailed its jumbo lending in the early days of the pandemic. Now, jumbos account for a growing share of United Wholesale’s production and the firm is issuing non-agency MBS.
An increase in jumbo originations helped to grow servicing portfolios at many shops during the second quarter. Top-ranked Wells Fargo, however, saw its jumbo servicing portfolio decline. (Includes data chart.)
In the past two weeks, $2.74 billion of non-agency MBS were gobbled up by investors. GSE-eligible mortgages for non-owner-occupied properties accounted for half of the dollar volume in the deals.
Jumbo mortgages and non-qualified mortgages can generate better margins than agency products. Still, the loans don’t necessarily offer a guaranteed path to profits.
The three servicers added significant volume to their portfolios thanks to the surge in non-agency MBS issuance during the second quarter of 2021. The performance of securitized loans also continues to improve. (Includes data chart.)
The offerings in the non-agency MBS market range from deals backed by prime jumbo mortgages to investment-property loans that were eligible for sale to the GSEs to non-QMs.
The real estate investment trust’s income from the aggregation of jumbo mortgages dropped while its business-purpose lending segment flourished. Margins on jumbos took a hit due to competition in the sector.
Chase was the most active player in the non-agency MBS market in late July, with deals involving jumbos, investment-property mortgages and a risk-sharing transaction.
Issuance of prime jumbo MBS increased by 54% on a sequential basis in the second quarter. Refis accounted for much of jump, including a large amount of loans with a cash-out component. (Includes two data charts.)