Originations of nonconforming mortgages are increasing as lenders get more comfortable with the loans and seek to maintain production levels. Some $7.0 billion in nonconforming mortgages were originated in the second quarter of 2017, according to estimates by Inside Nonconforming Markets. The category includes nonprime loans, mortgages that don’t meet the qualified-mortgage test and other non-agency products, but it excludes prime jumbo loans. In our surveys ... [Includes one data chart]

Officials at Starwood Property Trust announced last week that the company will acquire non-qualified mortgages with funding provided by new membership in the Federal Home Loan Bank system. Starwood is a real estate investment trust that has traditionally focused on commercial mortgages. Starwood said it gained membership in the FHLBank of Chicago shortly after the end of the second quarter of 2017. Jeffrey DiModica, president of Starwood, said the REIT will ...

JPMorgan Chase and Redwood Trust are set to continue their regular issuance of non-agency mortgage-backed securities, with deals scheduled to close on Aug. 30. The planned JPMorgan Mortgage Trust 2017-3 is a $1.02 billion deal, while Sequoia Mortgage Trust 2017-6 is sized at $355.4 million. Both of the MBS are predominantly backed by non-agency jumbo mortgages along with some loans eligible for sale to the government-sponsored enterprises. Rating services ...

Two nonbanks involved in originating and acquiring non-qualified mortgages aren’t satisfied with the amount of volume they have taken in thus far. “We like our portfolio, but we wish it would ramp faster,” Mark Tecotzky, co-chief investment officer at Ellington Financial, said during the company’s earnings call for the second quarter. Ellington has made an equity investment in an unidentified lender and as of the end of the second quarter was holding non-QMs with an unpaid principal balance of ...

The Consumer Financial Protection Bureau’s planned review of the ability-to-repay rule prompted comment letters from trade groups representing various industry participants along with individual comment letters from JPMorgan Chase and Wells Fargo. The big banks were critical of certain aspects of the ATR rule and requested changes that could increase originations of non-agency mortgages. “The ATR/qualified mortgage rule is not working as desired,” said Michael Weinbach, a ...

Legislation being pushed by Republicans in Congress would reduce appraisal requirements for a unique set of mortgages: those with balances of $250,000 or less that are held in portfolio for three years. Supporters of the legislation claim the carve-out will help first-time homebuyers and lenders in rural areas, while consumer advocates caution that the proposal could lead to practices similar to those that contributed to the financial crisis. H.R. 3221, the Securing Access to Affordable Mortgage Act ...

Citadel Servicing Corp. recently launched a one-month bank-statement program for self-employed borrowers. While some lenders offer bank-statement programs, borrowers are typically required to provide at least one year of documentation. Citadel stressed that deposits into the borrower’s bank account aren’t the determinant figure to verify income. “Income is attested to and declared [by the borrower], a Citadel underwriter will confirm that ... [Includes three briefs]

Simplifying and aligning the default servicing policies of the conventional conforming and the government-backed mortgage markets would better serve the mortgage industry and homeowners, according to industry experts. In a recent discussion on how regulatory burden and high servicing costs might impede lending, members of the Mortgage Servicing Collaborative agreed on the need for streamlined and harmonized federal, state and agency policies and rules on servicing. Increased regulatory requirements have caused mortgage-servicing costs to skyrocket in recent years, experts said. Even though the quality of servicing has improved, the new regulations are complex and costly, they noted. Multiple pressures placed upon servicers have suppressed mortgage lending, making it harder for borrowers with tainted credit to obtain a mortgage, according to the ...

FHA production increased slightly even as VA originations fell by a larger percentage in the second quarter of 2017, an analysis of the agencies’ lending activities found. FHA ended the quarter with $60.8 billion in forward mortgage endorsements, up 1.8 percent from the previous quarter. In contrast, VA originations declined by 4.9 percent over the same period, closing the second quarter with $40.8 billion. FHA and VA production typically gain share when the purchase-mortgage lending increases. For example, Inside Mortgage Finance reported that purchase mortgages comprised 71.3 percent of loans securitized in Ginnie Mae mortgage-backed securities in 2Q17, compared to 59.9 percent in Fannie Mae and Freddie Mac MBS. FHA endorsements over the first half of 2017 totaled $120.6 billion, of which $86.0 billion were purchase loans. This was up 4.8 percent from the same six-month period ... [Charts]

Reverse mortgage lenders are asking FHA to clarify the applicability of state statutes of limitations on collections and foreclosures involving Home Equity Conversion Mortgage loans. In a comment letter to the Department of Housing and Urban Development, the National Reverse Mortgage Lenders Association sought clarification to avoid any potential risk to the department and reverse mortgage lenders. Since federal agencies are not subject to state statutes of limitations, the NRMLA asked the FHA to confirm that HECM loans assigned to HUD are not covered by state statutes of limitations on collections and foreclosure. The trade group also requested FHA to clarify whether HECM regulations and program guidelines preempt any such state law. “Requiring mortgagees to assign loans to HUD and make certifications that such loans are and will be ...