Redwood Trust took three months off from issuing jumbo MBS but came back with something of a doozy this week: a $306.05 million deal that will include some loans that don’t meet standards for qualified mortgages and some loans that weren’t subject to third-party due diligence reviews. Sequoia Mortgage Trust 2014-2 is set to receive AAA ratings with credit enhancement of 7.75 percent on the top-rated tranche. While the credit enhancement requirements are somewhat high, a jumbo MBS from Redwood in November had even higher credit enhancement levels, suggesting that the non-QMs and lack of full due diligence aren’t a major concern. Only three of the 438 mortgages to be included in the deal are...

Fannie Mae’s and Freddie Mac’ home retention activity declined for the most part during the first quarter of 2014, according to a new analysis of Federal Housing Finance Agency data by Inside The GSEs.Total loss mitigation activity – total home retention efforts and foreclosure alternatives combined – declined 8.9 percent from the first quarter of the year to 130,854 and was down 28.9 percent from year-ago levels.

Sun Bancorp, a $3.5 billion banking institution in New Jersey, is leaving the retail mortgage banking business and cutting back on direct home-equity lending due to declining profitability and tighter regulation. The moves are part of a comprehensive plan presented by Thomas O’Brien, Sun Bancorp’s new president and chief executive officer, who was brought on board as a consultant in April to restructure the company and ... [Includes one data chart]

Fannie Mae and Freddie Mac generated $141.8 billion in single-family mortgage-backed securities during the second quarter of 2014, rebounding from the dismal first three months of the year, according to a new Inside The GSEs analysis. That was up 9.8 percent from the 14-year record low Fannie/Freddie MBS production of just $129.2 billion during the first quarter. However, the April-June cycle generated the second lowest quarterly volume since the end of 2008, and refinance volume continues to reach new lows – falling another 8.5 percent from the previous quarter.

Mortgage professionals continue to face a tough job market, but they can still find gainful employment depending on what their position is. No one is completely secure in the current economic environment, although mortgage brokers and loan officers may have the best standing. “Demand for key talent has suddenly spiked,” said Rick Glass, a principal in R.T. Glass & Associates of California, a mortgage recruiting firm. Mortgage brokerage firms added ...

The next gold rush in the mortgage industry may be home loans that fall outside the legal safe harbor for qualified mortgages under new rules that took effect in January. And like any bonanza, it’s hard to tell how big the mother lode is. According to Deutsche Bank Securities, it could be a staggering $600 billion a year, but that estimate comes with a lot of caveats. For starters, Deutsche Bank estimated that about $52 billion of 2013 mortgage originations were ...

The decline in refinance activity in the past year has prompted a closer look at differences in interest rates as lenders compete for borrowers. Lenders that don’t offer the lowest rate suggest that there’s more to the mortgage decision than just a low interest rate, particularly because rates are at historic lows. LendingTree, a firm that allows potential borrowers to compare loan offers, recently launched an ongoing study to track the difference between ...

Walter Investment Management took steps last week to transition to a business model that requires less capital by funding Walter Capital Opportunity and completing an excess servicing spread sale with WCO. WCO is a real estate investment trust that Walter formed in November to hold mortgage servicing rights. Last week, WCO acquired 70 percent of the excess servicing spread from a pool of loans serviced by Green Tree Servicing ...

By now, the word is out: the Federal Housing Finance Agency is exploring codifying capital minimums for nonbank servicers as a way to help Fannie Mae and Freddie Mac better manage counterparty risk. Industry officials tracking the topic told Inside Mortgage Trends they don’t believe the FHFA is necessarily worried about the capital positions of the big three nonbanks: Nationstar Mortgage, Ocwen Financial, and Walter Investment Management ...

The rebound in new business at Fannie Mae and Freddie Mac during the second quarter of 2014 was fueled by a hefty increase in purchase-mortgage activity, but it also featured clear shifts in the volume of loans coming from different kinds of lenders. A new Inside Mortgage Trends analysis of loan-level data on mortgage-backed securities issued by the two government-sponsored enterprises shows that nonbank lenders continued to ... [Includes 3 data charts]