A handful of publicly traded real estate investment trusts have been quietly making inquiries about buying residential loans that do not meet the qualified mortgage standard, including subprime credits and even unsecured consumer loans, according to players on both sides of the equation. One executive who manages a REIT that plays in the jumbo market admitted as much in an interview with Inside MBS & ABS, but pointed to one major deterrent: the Consumer Financial Protection Bureau. “We’ve tried to get clarifications from them on such things as the ability-to-pay rule, but they haven’t been very helpful,” he said. The source noted that his REIT has so far avoided buying any nonprime, non-QM loans, saying he fears the regulator will ...

Borrowers are increasingly changing the terms for loans backing recently issued commercial MBS shortly after the deal closes, said Fitch Ratings. The rating service said it has received about 15 requests this year for rating confirmations pertaining to loans from 2014 or 2015 vintage deals. While the majority of requests have been loan assumptions by new borrowing entities or ownership structures, a handful have contemplated more fundamental changes to other loan terms. But Fitch said the problem arises when some of the proposed changes would have required that the loan be modeled differently or more conservatively, had it known about the changes prior to issuance. The rating agency is especially concerned about borrowers trying to add more debt. “Additional debt, ...

The correspondent channel during the third quarter of 2015 took its biggest share of total mortgage originations in years, according to a new Inside Mortgage Finance analysis and ranking. Mortgage lenders acquired $165 billion of home loans from correspondent originators during the third quarter, a 1.9 percent increase at a time when overall production fell 7.1 percent. The surge pushed the correspondent share of new originations to 36.3 percent ... [Includes four data charts]

A number of factors could prompt the Federal Housing Finance Agency to reduce the guaranty fees charged by the government-sponsored enterprises in 2016, according to Barclays Capital analysts. “There is an economic argument as well as a policy argument to be made for reducing g-fees, especially given a greater focus on credit availability and less focus on shrinking the GSEs’ footprint,” Barclays said in a recent report. “A g-fee cut could be one of the policy developments ...

Fannie Mae has announced the winning bids for its third nonperforming loan sale while Freddie Mac has begun accepting bids for its eighth NPL transaction for 2015. Up for sale in the Fannie Mae deal were approximately 7,000 NPLs totaling $1.24 billion in unpaid principal balance, divided among three pools. The winning bidders in the transaction are Fortress, through its New Residential Investment Corp., for the first and third pools and Goldman Sachs for the second pool. The government-sponsored enterprise announced the sale in October to lighten its inventory of NPLs and manage credit losses on its delinquent loan portfolio. The GSE gave up on the severely delinquent loans after attempts to cure them through loss mitigation failed. Investors and ...

Stonegate Mortgage – which holds the distinction of being the last nonbank mortgage firm to go public – is in the process of disposing of a large swath of its retail branch network in favor of a third-party originator strategy that relies heavily on brokers and correspondents. In total, it expects to close 47 branches outright by yearend or allow the offices to be taken over by a competitor. Although the company declined to discuss its strategy, recent press statements indicate it will maintain

Trade groups representing participants in the primary mortgage market and the non-agency mortgage-backed security market are calling on federal banking regulators to address state laws that allow for “super-priority” status for homeowners’ association liens. Risks from HOA super-priority liens have been of particular concern following a September 2014 ruling by the Nevada Supreme Court. The court allowed for a homeowners’ association foreclosure sale to ...

The Federal Housing Finance Agency announced that the baseline conforming-loan limit will remain at $417,000 in 2016. As of the third quarter of 2015, the house-price index used to make adjustments in the conforming-loan limit still had not caught up to the level set back in the third quarter of 2007. However, high-cost loan limits will go up in 39 counties next year, the FHFA said.

Originations of jumbo mortgages declined in the third quarter of 2015 compared with the previous quarter, according to a new ranking and analysis by Inside Nonconforming Markets. A number of lenders continue to loosen underwriting standards and offer favorable pricing in an effort to originate jumbos. An estimated $85.0 billion in jumbo mortgages were originated in the third quarter. While production fell 8.6 percent on a quarterly basis, originations through ... [Includes one data chart]

The first nine months of 2015 have seen a tremendous increase in FHA single-family originations as borrowers took advantage of a 50 basis-point premium reduction implemented earlier this year, according to Inside FHA/VA Lending’s analysis of agency data. Total FHA loan production during the first nine months of 2015 was up a whopping 81.3 percent increase. Data also showed a 13.1 percent increase in the third quarter from the prior quarter. It is hard to imagine that back in February this year, we reported a dismal ending for 2014, where overlays and high-loan costs caused an 8.1 percent decline in FHA endorsements in the fourth quarter and a 36.6 percent drop from 2013. In 2015, FHA fixed-rate originations increased 12.7 percent from the second to the third quarter, and rose 86.0 percent on a year-to-date basis. In 2014, conversion ... [ 2 charts ].