The number of issuers offering jumbo mortgage-backed securities will increase in 2015, according to analysts at various rating services, but total issuance volume isn’t expected to grow by much compared with this year. Attracting investors willing to purchase AAA tranches of jumbo MBS remains a key obstacle. Some $5.4 billion in jumbo MBS were issued during the first three quarters in 2014, according to Inside Nonconforming Markets, including $3.1 billion in the third quarter ...

Non-agency financing sources could replace the government-sponsored enterprises with relatively minor impacts for borrowers, according to a report released this week by the Congressional Budget Office. “Although the transition to a new structure could significantly decrease the number of borrowers who received mortgages backed by Fannie Mae or Freddie Mac, additional private capital would replace most of the lost funding,” the CBO said. The nonpartisan ...

Origination of interest-only mortgages declined in 2014 after the rule took effect that made them ineligible for qualified-mortgage status, but the product is far from dead and could see a rebound in 2015. A group of 15 lenders originated a total of $21.59 billion in IOs through three quarters in 2014, according to a new Inside Nonconforming Markets analysis and ranking. That was down 28.0 percent from the same period in 2013. IO lending slowed ... [Includes one data chart]

Bank and thrift holdings of first-lien mortgages increased in the third quarter of 2014 compared with the third quarter of 2013, according to a new ranking and analysis by Inside Nonconforming Markets. Banks and thrifts held $1.76 trillion in first liens as of the end of the third quarter of 2014, up 0.4 percent compared with the same period last year. The growth was driven by jumbo mortgages. On a quarterly basis, portfolio runoff and loan sales slightly outpaced ... [Includes one data chart]

Industry attorneys warn that documenting borrowers’ income for compliance with ability-to-repay standards established by the Consumer Financial Protection Bureau can prompt fair lending liability issues. During a webinar hosted by Inside Mortgage Finance Publications last week, R. Colgate Selden, counsel at the law firm of Alston & Bird, said there are a number of fair lending issues surrounding income documentation and determining debt-to-income ratio calculations ...

A savings bank that focuses on subservicing has been the most active servicer of loans in jumbo mortgage-backed securities since 2013, according to Fitch Ratings. A number of rating services view the firm, Cenlar, as a strong servicer with good prospects for continued growth. Last week Fitch affirmed its RPS2 rating for Cenlar as a servicer of prime mortgages that demonstrates “high performance in overall servicing ability.” Fitch said that since 2013, Cenlar has added ...

Most major servicers participating in the Home Affordable Modification Program and subject to national mortgage servicing settlements are generally improving their performance, according to officials overseeing the programs. CitiMortgage will receive incentive payments from HAMP that were being withheld due to poor performance, the Treasury Department noted in a report released last week. Citi went from needing “substantial” improvement in HAMP ...

Credit Suisse appears to be close to issuing a jumbo mortgage-backed security with some loans sourced from Five Oaks Investment. Stonegate Mortgage announced an expansion of its offerings of non-agency mortgage products last week. The lender is offering adjustable-rate mortgages with loan-to-value ratios as high as 90 percent and no requirement for mortgage insurance. The loans can have balances as high as the conforming loan limit ... [Includes three briefs]

FHA originations are expected to decline modestly in 2015 unless the agency gives in to industry pressure to lower mortgage insurance premiums and lenders ease up on their overlays, according to analysts. Analysts anticipate no meaningful decline in FHA market share next year but do expect some drop as private mortgage insurance become more competitive, especially among borrowers with 720+ FICO scores. Overall, analysts expect 2015 to be slightly better than 2014 because of increased purchase-mortgage lending, which is partly offset by lower refinance activity. Mortgage volumes should climb to $1.18 trillion in 2015, some say. At Keefe, Bruyette & Woods, analysts Bose George and Chas Tyson predict private MIs will take more market share from the FHA in 2015. They do not expect meaningful policy changes from the FHA this year. For example, FHA has given ...

Congress denied funding for an enhanced FHA housing counseling initiative for first-time homebuyers and rejected a request for authority to collect a new FHA fee to enhance quality-assurance reviews. President Obama this week signed the FY 2015 Consolidated and Further Continuing Appropriations Act, a comprehensive package of 11 funding bills for federal agencies. The bill does not include the provisions the FHA had sought to toughen enforcement and help lower costs for first-home purchases. The House passed the $1.1 trillion omnibus spending bill, H.R. 83, by a vote of 219-to-206 on Dec. 11, narrowly avoiding a government shutdown. The Senate approved the bill on Dec. 13. The bill allocates $47 million to the Department of Housing and Urban Development’s housing counseling program and $50 million for foreclosure mitigation counseling. It also provides $400 billion in ...