The Treasury Department is making progress corralling various participants in the non-agency mortgage-backed security market, slowly prompting changes aimed at attracting large investors. The effort started nearly a year ago, when Michael Stegman, counselor to the Treasury on housing finance policy, first proposed the issuance of a benchmark transaction in November. “The benchmark transaction process has reset relationships among transaction parties and is ...

Hatteras Financial has started to acquire jumbo adjustable-rate mortgages that offer more attractive returns than agency mortgages. Officials at the real estate investment trust note that while Hatteras started operations in 2007, the REIT did not start investing in individual loans until December. “I’m not sure that we know 100 percent what the extent of the opportunity is going to be,” Michael Hough, Hatteras’ chairman and CEO, said during a recent call with investors. “It is something ...

Five Oaks Investment this week issued its first jumbo mortgage-backed security, although the real estate investment trust has contributed to jumbo MBS issued by others. The $267.19 million Oaks Mortgage Trust Series 2015-1 received largely favorable reviews from the rating services, though Five Oaks’ lack of a track record in the jumbo MBS market helped prompt credit enhancement of 8.45 percent on the senior tranche. Both Fitch Ratings and Moody’s Investors Service said they found that ...

First Republic Bank maintained its lead as the top contributor to jumbo mortgage-backed securities issued in the first quarter of 2015, according to a ranking by Inside Nonconforming Markets. First Republic was identified as contributing $1.43 billion to jumbo MBS issued during the quarter, accounting for 31.0 percent of all jumbo MBS activity. The bank was also the top jumbo MBS contributor for all of 2014, with $1.46 billion in identified contributions ... [Includes one data chart]

Credit Suisse and Redwood Trust, the two dominant jumbo mortgage-backed securities issuers since 2010, continue to differ in terms of jumbo MBS offerings. While their latest deals include a number of similarities involving credit characteristics, the Redwood deal includes a relatively high share of non-qualified mortgages. The $356.45 million Sequoia Mortgage Trust 2015-2 received AAA ratings with credit enhancement of 5.00 percent on the senior tranche. That’s the lowest ...

Ocwen Financial’s renewed focus on the non-agency market includes plans for much higher margins than what the nonbank produced servicing and originating agency mortgages. However, officials at Ocwen stressed this week that the nonbank is not completely exiting the agency servicing market. Michael Bourque, an executive vice president and CFO at Ocwen, reported that the nonbank had a pre-tax income margin of 33 percent in 2012. By 2014, Ocwen’s margin had declined to ...

Wells Fargo and JPMorgan Chase account for the vast majority of bank holdings of negative amortization mortgages, according to a new ranking and analysis by Inside Nonconforming Markets. Bank exposure to negative amortization mortgages continues to dwindle as originations of such loans largely stopped after the financial crisis. Large chunks of the holdings at Wells and Chase are due to acquisitions of Wachovia and Washington Mutual, respectively ... [Includes one data chart]

Walter Investment Management’s Green Tree Servicing agreed to pay $48 million for consumer redress and a $15 million civil money penalty due to a settlement with the Consumer Financial Protection Bureau and the Federal Trade Commission. The federal regulators alleged that Green Tree failed to honor modifications for loans transferred from other servicers, among other issues. The regulators said a large number of loans Green Tree acquired from ... [Includes two briefs]

One thing investors and analysts look for is revenue growth and Ocwen Financial did not deliver. But at least all of its lending licenses are intact...

VA home loan guaranty originations nearly caught up with FHA single-family volume in the first quarter of 2015, thanks to a strong pickup in veteran loan refinancings, an Inside FHA/VA Lending analysis of Ginnie Mae issuance data indicated. Refi loans accounted for 58.5 percent of VA loans securitized in the first quarter compared to just 34.4 percent of FHA loans in Ginnie mortgage-backed securities. Approximately $35.0 billion in VA loans were securitized in Ginnie Mae MBS in the first quarter, up 5.5 percent from the fourth quarter of 2014. On the other hand, $35.6 billion of FHA loans were securitized during the same period, down 1.8 percent from the prior quarter. Of the VA loans in Ginnie MBS, $14.5 billion were purchase mortgages, mostly delivered through retail and loan correspondents. Brokers accounted for only 8.5 percent of the purchase loans. Securitized VA purchase volume, however, was ... [2 charts]