The first rated post-crisis non-agency MBS backed by a significant share of nonperforming mortgages paid off recently, offering insights into how the deal performed and how investors fared. The $372.80 million Mortgage Fund IVc Trust 2015-RN1 was issued by Bayview Asset Management in October 2015. It received “A” ratings from Fitch Ratings and Morningstar. Fitch said it capped its rating “due to the idiosyncratic and adverse-selection risks associated with NPL collateral.” At issuance, 34.9 percent of the loans were nonperforming and 78.0 percent had been modified. The rating services said...
The National Credit Union Administration gets another chance to recover MBS losses incurred by a now-defunct federal credit union, while The Royal Bank of Scotland and Massachusetts Mutual Life Insurance announce a confidential settlement agreement to resolve the latter’s MBS claims. The U.S. Court of Appeals for the Ninth Circuit has vacated a 2015 order by the Central District of California dismissing NCUA’s claims on behalf of failed Western Corporate FCU, which the agency placed in conservatorship in March 2009 and later in liquidation. The agency is acting as liquidating agent for Wescorp against Nomura Home Equity Loan, Inc. The NCUA filed...
The next mortgage-backed security from Lone Star Funds backed by new nonprime originations will be larger than the deal it issued in June, according to presale reports published this week. The planned $216.97 million COLT 2016-2 will be the largest MBS backed by post-crisis nonprime originations, topping the $161.71 million COLT 2016-1. The MBS scheduled to close next week differs in some ways from the previous MBS from Lone Star. The firm’s Caliber Home Loans ...
A number of non-agency lenders are looking to originate mortgages for investment properties using a debt-to-income ratio based on income from the property rather than the borrower’s income, according to Moody’s Investors Service. “Using property DTI underwriting on loans secured by single investment properties introduces risks stemming from the lack of visibility on a borrower’s other debt obligations relative to a steady source of income that lenders can ...
A $6.20 billion portfolio backed largely by jumbo mortgages originated in recent years was sold last week, according to Interactive Data. The portfolio appears to have been sold by Premium Point Investments, though the hedge fund wouldn’t confirm that. Premium Point backed WinWater Home Mortgage, which stopped issuing jumbo mortgage-backed securities earlier this year. Impac Mortgage Holdings announced this week an offering of 2.5 million shares ... [Includes two briefs]
VA refinance mortgages accounted for the biggest share of total insured refis during the first six months of 2016, according to an Inside FHA/VA Lending analysis of agency refi data. On a monthly basis, VA refi totals exceeded refis with FHA and private mortgage insurance, peaking at $9.3 billion (58.1 percent of total VA originations) in April. Over the six-month period, the refi share of VA loans securitized by Ginnie Mae averaged 52.3 percent, compared to 29.6 percent for FHA and 21.0 percent for private MI loans securitized by Fannie Mae and Freddie Mac. In terms of total volume, however, FHA held a commanding lead, $123.0 billion, over private MIs ($102.7 billion) and VA ($84.8 billion). Interestingly, the average interest rate on VA refi loans, 3.6 percent, over the six-month period was lower than FHA’s and private MIs’ note rates of 3.9 percent and 4.0 percent, respectively. There is no clear ... [1 chart]
Ginnie Mae issued $46.5 billion of single-family mortgage-backed securities in August, up slightly from July, according to an analysis of Ginnie data. Single-family MBS monthly issuance in August was the highest monthly volume so far this year. Total issuance also was up 12.3 percent from the same month last year., Strong purchase and refinance originations in the second quarter helped push production in the third quarter. Although purchase loans with private mortgage insurance outpaced gains in FHA and VA loans in the second quarter, deliveries to Ginnie so far appear to indicate a strong third quarter. Meanwhile, VA volume has been fueled largely by refinance activity over the past few years and does not appear to be letting up. PennyMac and Freedom Mortgage battled for first place with $4.35 billion and $4.34 billion, respectively, in MBS issuance in August. Despite cutting back on its ... [1 chart]
Issuers delivered $8.1 billion of rural mortgage loans with a U.S. Department of Agriculture guarantee into Ginnie Mae pools during the first six months of 2016, according to an analysis of Ginnie data. Securitized USDA mortgages accounted for 1.3 percent percent of total MBS issued by Ginnie Mae during the period and comprised 2.5 percent of total loans originated during the six-month period. USDA-backed loan deliveries to Ginnie Mae in the second quarter rose 9.8 percent from the previous period. Year-over-year, issuance of MBS backed by rural loans fell 3.8 percent. USDA-backed mortgages require no downpayment. Over the first six months, the average credit score for rural borrowers was 688.1 and the average debt-to-income ratio was 34.9 percent. An estimated 93.2 percent of USDA loans originated during the period were purchase mortgages, 1.0 percent were refinances and the ... [ 2 charts ]
Originations of purchase-money mortgages jumped 44.3 percent from the first to the second quarter of 2016, without any sign of significant easing in underwriting standards. Mortgage lenders produced an estimated $267.0 billion of purchase loans during the second quarter, lifting year-to-date purchase originations to $452.0 billion, an 8.1 percent increase from the first half of last year. The refinance market still had...[Includes three data tables]
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