After declining for two consecutive quarters, the delinquency rate on jumbo mortgages increased in the third quarter of 2017, according to Black Knight. Hurricanes contributed to the uptick in delinquencies, and performance in the jumbo market remains strong overall. The delinquency rate on non-agency jumbo mortgages was 1.60 percent as of the end of September, according to Black Knight. That was up from 1.49 percent in the previous quarter ... [Includes one data chart]
A recent report from the JPMorgan Chase Institute found that payment reduction was the most effective form of post-crisis loan modification, and a 10 percent drop in the mortgage payment lowered default rates by 22 percent.
Panelists during a House Financial Services Subcommittee on Housing and Insurance hearing this week disagreed on the type of credit-risk sharing transfers that future MBS guarantors should use in a reformed housing-finance system.
A subsidiary of DRB Capital is set to issue a $59.9 million ABS backed by annuities and life-contingent structured settlement receivables. The deal received AAA ratings from Morningstar Credit Ratings late last week.
The dollar volume of non-agency MBS backed by non-qualified mortgages could double or even triple next year, according to industry analysts. The increased issuance is expected to come from nonprime and prime borrowers who don’t qualify for conforming mortgages.
The single security initiative and issuance of the first uniform MBS are on track for implementa-tion and issuance in the second quarter of 2019 and the government-sponsored enterprises are taking steps to make sure the market is ready, according to a progress update released this week by the Feder-al Housing Finance Agency.
A handful of real estate investment trusts are looking to partner with nonprime lenders in a move that could help prime the pump for a significant increase in securitizations of non-agency mortgages that stretch the credit box.
It appears that Congressional reform of the housing-finance system – and final resolution of Fan-nie Mae and Freddie Mac – is back on track with a key piece of good news for MBS investors: an ex-plicit federal guarantee on conventional product looks likely.
Rep. Hensarling: “This means the government needs to be in the last-loss position, with multiple layers of private capital, as diversified as possible, stacked up before it.”
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