Borrower demand for jumbo mortgages declined somewhat in the fourth quarter of 2015 compared with the previous quarter, and banks plan on loosening underwriting standards for the loans, according to the Federal Reserve’s senior loan officer opinion survey. Industry participants stress that underwriting standards for jumbos remain strong, with poor performance unlikely. Senior LOs were asked to evaluate demand for purchase mortgages in the fourth quarter of 2015 ...

The Consumer Financial Protection Bureau’s disclosure rule has caused some disruptions in the non-agency market, but a number of lenders suggest that they’ve made adjustments to TRID and expect to return to business as usual. TRID disclosure requirements took effect for loan applications submitted on Oct. 3 and beyond. In the weeks after, many lenders reported longer closing timelines along with issues involving sales of non-agency mortgages due to ...

Home prices in California and other states where jumbo mortgages are concentrated are “overheating,” according to analysts at Fitch Ratings. The firm said rapid home price growth in parts of California, Florida and Texas appears to be exceeding fundamentals. Fitch estimates that homes in most major metropolitan areas in those states are currently overpriced. Grant Bailey, a managing director at Fitch, said home prices in the San Francisco area are a particular concern ...

Non-agency mortgage-backed security issuers and investors continue to work to make adjustments that will help increase activity in the market. Among the issues under discussion are representations and warranties and the use of a deal agent or transaction manager. “Industry participants are now focusing on clearly identifying which parties to a transaction are covered by the current rep-and-warrant framework, and to which activities it is applicable,” according to a recent report ...

Two Harbors Investment is focusing on jumbo mortgage conduit activities in an effort to differentiate itself from other real estate investment trusts. The REIT issued the most jumbo MBS in 2015, based on deal count, and is one of only two firms to have issued a jumbo MBS this year. Officials noted that the REIT is working to reduce its investments in agency MBS with an eye toward allocating capital to sectors with more attractive returns, including conduit operations ...

The Obama administration and Republicans in Congress recently released proposed federal budgets for fiscal year 2017, including provisions involving the government-sponsored enterprises. While both parties called for the GSEs to be eliminated, the system that will replace Fannie Mae and Freddie Mac remains a topic of intense debate, limiting prospects for action by Congress. “To finish addressing the weaknesses exposed by the financial crisis, the government must ...

AG Mortgage Investment Trust recently formed a mortgage banking platform called Arc Home. The real estate investment trust managed by a subsidiary of Angelo, Gordon & Co. said Arc Home plans to originate jumbo mortgages and non-qualified mortgages, along with FHA loans, through retail, wholesale and correspondent channels. Arc Home will be led by Barry Bier, Sandy Blitzer, Martin Schroeter and Brad Brautigam. Some of the executives ... [Includes five briefs]

FHA forward mortgage endorsements fell significantly in the fourth quarter of 2015 with a decline in purchase mortgages and an even bigger drop in refinance loans due to rising interest rates, according to an Inside FHA/VA Lending analysis of agency data. Total FHA production fell 22.2 percent from the third quarter to $58.1 billion in the fourth quarter, spurred by steep declines in purchase originations (down 21.5 percent) and refis (30.0 percent). Fixed and adjustable-rate mortgages also saw their volumes drop by 22.1 percent and 30.2 percent, respectively, during the same period. The percentage of conventional loans that refinanced into FHA loans decreased slightly. FHA baseline lending (loans below $417,000) also declined by 22.0 percent quarter-to-quarter, as did FHA conforming jumbos (loan amounts up to the statutory high-cost loan limit), which saw volume drop 24.4 percent in the fourth quarter. FHA jumbos exceeding $625,500 did not escape the carnage as production fell ...

Nonbanks now rule the top echelon of FHA lenders with one major bank left in a sector once ruled by large banks. That lone bank is Wells Fargo, clinging hard and fast to its number-two spot among the top 10 FHA lenders in 2015. Wells Fargo, which recently agreed in principle to pay $1.2 billion to resolve FHA-related civil claims, ended 2015 with $6.3 billion in total FHA originations, up from $5.1 billion in the prior year. Gone from the top lender ranking is Bank of America, which in 2014 ranked fifth with total originations of $1.7 billion. Currently, BofA is 22nd in the ranking with $1.4 billion in FHA loans made last year. Also gone from the elite ranking is JPMorgan Chase Bank, which in 2014 was sixth with $1.7 billion in total originations. Data indicate that the bank has been gradually pulling back its FHA lending over the past year and has now dropped to number 159 in the ... [1 chart]

Sellers delivered $35. 2 billion in VA loans into Ginnie Mae pools in the fourth quarter of 2015, down 15.0 percent from the previous quarter, according to Inside FHA/VA Lending’s analysis of Ginnie loan-level data. Retail lenders and correspondents accounted for the bulk of VA loans securitized during the quarter. Retail accounted for 45.8 percent of VA purchase loans, enjoying a slight edge over correspondents, which comprised 45.5 percent of securitized VA loans. The broker share of securitized VA purchase loans was 8.7 percent, down 21.2 percent from the third quarter. Meanwhile, retail accounted for 53.8 percent of Ginnie mortgage-backed securities backed by VA refinance loans in the fourth quarter, while correspondents’ share was down to 28.5 percent. The broker channel accounted for 17.7 percent of VA loans securitized during the period. The average FICO score on Ginnie VA loans in the ... [1 chart]