Some $800 million in servicer-advance ABS was issued by New Residential last week, helping to restart activity in the sector. New servicer-advance ABS issuance had stalled due to issues with ratings from Standard & Poor’s, the predominant rating service in the market. The two deals concurrently issued by New Residential followed a $225 million issuance by Ocwen Financial at the end of June. The firms helped end a year-plus long break in the issuance of rated servicer-advance ABS. In April 2014, S&P placed...

Bond and MBS prices held steady this week, but market watchers expect that volatility, in general, will persist on pricing until the Federal Open Market Committee meets later in the month to discuss the fate of short-term interest rates. Deutsche Bank, among others, predicts that the FOMC will call for a rate hike then, but it isn’t entirely certain given China’s financial problems. If China continues to crater, the Fed could hold off. Others are predicting...

Activity in the Home Affordable Refinance Program in the second quarter of 2015 was down 0.3 percent from the first three months of the year, according to new loan-count figures released by the Federal Housing Finance Agency. Fannie Mae had a slight increase in HARP activity and accounted for 59.3 percent of the total for the two government-sponsored enterprises. Freddie Mac volume was down 1.5 percent from the first quarter. HARP volume represented...[Includes one data table]

Legacy-era non-agency MBS litigation continues to be a ripe field of opportunity for U.S. regulators and industry attorneys alike, years after the financial crisis and Great Recession ended, thanks to some key recent judicial rulings. Late last month, Judge Alvin Thompson of the U.S. District Court for the District of Connecticut gave the green light to the Federal Housing Finance Agency to continue to pursue its claims against the Royal Bank of Scotland. The regulator for Fannie Mae and Freddie Mac alleged that RBS provided misleading statements related to $32.1 billion in RMBS the bank sold to the two government-sponsored enterprises between 2005 and 2008. The thrust of the FHFA’s complaint is...

Of course, there is a way to avoid the zero capital cushion dilemma. Congress can pass legislation to allow the GSEs to build capital or FHFA can act...

Bank and thrift holdings of first-lien mortgages continued to grow in the second quarter of 2015, according to an Inside Nonconforming Markets analysis of call reports. Most of the change occurred among the top three bank mortgage portfolios: Wells Fargo, Bank of America and JPMorgan Chase. Banks and thrifts held $1.81 trillion of first-lien mortgages as of the end of the second quarter of 2015. The holdings increased by 1.5 percent compared with ... [Includes one data chart]

Adjustable-rate mortgage originations increased by 19.5 percent during the second quarter of 2015, but ARM production this year trails 2014 levels significantly. An estimated $49.0 billion in ARMs were originated in the second quarter, bringing the total for 2015 to $90.0 billion. That represented just 11.2 percent of total first-lien originations for the first half of the year, compared with 18.9 percent over the first six months of 2014. Interest rates ... [Includes one data chart]

EverBank Financial has been able to maintain strong loan performance while building up its jumbo originations. EverBank had $1.46 billion in jumbo originations during the second quarter of 2015, up 31.6 percent from a year ago. The bank’s originations of conventional mortgages increased by 11.9 percent in that span, hitting $1.26 billion in the second quarter. In August, Moody’s Investors Service reaffirmed its rating of EverBank as a “strong” originator of jumbo mortgages ...

While the vast majority of jumbo mortgages being originated continue to feature tight underwriting standards, some lenders are willing to offer unique jumbos, with downpayments as low as 5 percent or allowing for borrowers who are unemployed. Parkside Lending recently launched a jumbo that allows for combined loan-to-value ratios as high as 95 percent. The lender doesn’t require mortgage insurance on the loans. “We believe our new jumbo loan offering ...

A portfolio of $16.53 million non-qualified mortgages is available for sale, according to an announcement last week by Mortgage Industry Advisory Corp. The jumbo adjustable-rate mortgages were originated by a “large Midwest bank” and are lightly seasoned, according to MIAC. The loans have an average unpaid principal balance of $688,855 and an average interest rate of 3.661 percent. The loans are largely purchase mortgages and ... [Includes two briefs]