Falling oil prices may have little impact on residential MBS even if distressed prime jumbo borrowers in oil-producing states were to default on their loans, according to Standard & Poor’s. The rating agency’s optimistic conclusion may be good news to investors concerned that job cuts in the oil industry will lead to high default rates among prime jumbo borrowers, particularly in states where a high percentage of workers are in oil production. Market information suggests that values of prime jumbo MBS in oil-producing states are being affected, as the market factors in the risk of losses arising from borrower defaults in these regions, the S&P report said. However, it is unclear whether the additional spread on MBS with high concentrations ...

Two Harbors Investment is preparing to issue a jumbo mortgage-backed security that will include loans subject to the TRID integrated disclosure rule. The deal could help resolve the so-called “TRID-lock” seen in the jumbo secondary market as industry participants try to sort out the liability posed by the controversial rule. “TRID has proved to be a very strong headwind,” Diane Wold, a managing director at Two Harbors, said last week at the ABS Vegas conference produced by ...

Bank and thrift first-lien portfolio holdings continued to grow in 2015, including a sharp increase in the fourth quarter, according to a new ranking and analysis by Inside Nonconforming Markets. Banks and thrifts held a total of $1.87 trillion in first-liens in portfolio at the end of the fourth quarter of 2015, up 0.9 percent from the end of the previous quarter and up 3.4 percent from the fourth quarter of 2014. The increase in holdings was largely driven by ... [Includes one data chart]

One of the major obstacles to increased issuance of non-agency mortgage-backed securities remains the lack of a deal agent to protect investors. Until last week, investors had not even agreed on the general responsibilities for a deal agent, suggesting that the implementation of the concept was a long way off. A working group, co-led by Alessandro Pagani, head of securitized assets at Loomis, Sayles & Company, announced principles for a deal agent last week ...

Two nonbanks with jumbo conduit operations have faced issues recently. Premium Point Investments recently announced the New Issue Opportunity Fund will no longer invest in new jumbo mortgage-backed securities from WinWater Home Mortgage. Premium Point is an asset-management firm that established WinWater in late 2013. Premium Point said the NIOF purchased approximately $3.3 billion in whole loans and invested in 10 mortgage-backed securities issued by ...

Competition from banks for conforming mortgages prompted Redwood Trust to discontinue its aggregation of mortgages for sale to the government-sponsored enterprises, according to officials at the real estate investment trust. “The business assumption that has changed is that we no longer believe that our conduit can generate sufficient conforming loan sale margins, primarily due to the unrelenting competitive pricing pressure from some major banks,” Redwood said in a document ...

Ocwen Financial recently reported a large loss in the fourth quarter of 2015 along with investigations by a number of regulators, leading to a sharp decline in the company’s stock price and pressure to restructure its priorities. Ocwen took a pre-tax loss of $129.3 million for the fourth quarter of 2015. The biggest contributor to the loss was a non-cash charge of $101.9 million to establish a valuation allowance against deferred tax assets in the United States and the U.S. Virgin Islands ...

The pessimistic pricing in the secondary market for jumbo mortgage-backed securities with exposure to the oil industry might be unwarranted, according to Standard & Poor’s. The rating service completed a stress test on the 59 jumbo MBS issued in 2012 and beyond. “Assuming the entire oil-sector workforce in three major oil-producing states defaults on their mortgages, even under extreme economic stress, the incremental collateral pool losses ... [Includes three briefs]

Mortgage M&A historians might recall that last decade, before the financial crisis struck, Countrywide Financial Corp. was in serious talks to buy PHH’s mortgage business...

With only a few isolated exceptions, VA and FHA lending was up sharply across the country last year, outstripping the private mortgage insurance business in nearly every state of the U.S., according to a new analysis by Inside FHA/VA Lending. Overall, FHA single-family mortgages securitized by Ginnie Mae increased 60.5 percent from 2014 and VA production was up 39.4 percent. Meanwhile, Fannie Mae and Freddie Mac posted a more subdued 26.2 percent increase in privately-insured loan volume. California remained the biggest mortgage market for the FHA, VA and private MIs, as well as uninsured mortgages. The FHA clearly won the mortgage insurance battle, boosting its share of insured loans in the Golden State from 41.1 percent in 2014 to 49.2 percent last year thanks to a whopping 89.8 percent jump in business. California had one of the highest concentrations of ... [ 3 charts ]