A number of underwriting characteristics for jumbo mortgages included in non-agency mortgage-backed securities shifted in the first quarter of 2014, according to an analysis by Inside Nonconforming Markets. And the decline in jumbo MBS activity during the quarter has prompted industry analysts to significantly reduce projections for issuance the rest of this year. Average credit scores declined, debt-to-income ratios increased and ... [Includes one data chart]

Issuers of jumbo mortgage-backed securities have been cagey about identifying the smaller lenders that have contributed mortgages to jumbo MBS. However, Inside Nonconforming Markets has uncovered 93 lenders that participated in deals issued in the first quarter of 2014. The lenders whose loans were included in jumbo MBS in the first quarter were largely small firms that don’t attract much attention. Most of the lenders participating in jumbo MBS ... [Includes two data charts]

Officials at Hatteras Financial revealed this week that the real estate investment trust plans to purchase jumbo adjustable-rate mortgages from lenders, branching out from a focus on investing in agency mortgage-backed securities. Hatteras recently established a flow program to purchase agency ARMs from 10 lenders. Michael Hough, the REIT’s CEO, said the program offers lenders an alternative to selling ARMs to the government-sponsored enterprises and ...

Kroll Bond Rating Agency, one of the most commonly used rating services for jumbo mortgage-backed securities in recent years, released its criteria this week for jumbo MBS that include mortgages subject to the Consumer Financial Protection Bureau’s ability to repay rule. The criteria from KBRA is similar to criteria from the other rating services, with higher credit enhancement requirements for certain loans that don’t meet the CFPB’s standards for qualified mortgages ...

Industry participants are divided on whether legislation under consideration in Congress to reform the government-sponsored enterprises will help encourage an increase in private capital in the mortgage market. In a speech this week, Shaun Donovan, the secretary of the Department of Housing and Urban Development, was adamant that the GSE reform bill from Sens. Tim Johnson, D-SD, and Mike Crapo, R-ID, will encourage non-agency investors to return to the mortgage market ...

United Wholesale Mortgage is now offering jumbos on a wholesale basis with debt-to-income ratios as high as 49 percent allowed. The loans won’t receive protections for qualified mortgages as the DTI ratio limit for jumbo QMs is 43 percent. Loan amounts on United Wholesale’s Big & Easy Plus loan go up to $1.5 million. The lender said it will allow loan-to-value ratios on the mortgage of up to 75 percent while a borrower will need ... [Includes four briefs]

Ginnie Mae has held up for several weeks an $8 billion sale of servicing rights from Bank of America to a nonbank because of missing documents on government-backed mortgages. Ted Tozer, president of the agency, confirmed the delay in approvals to Inside FHA Lending, but declined to name the nonbank on the buy-side of the transaction. However, sources familiar with the deal identified the counter-party as PennyMac. BofA and PennyMac would not comment. Once the missing documents are located and placed in the proper files, the deal will move forward, said Tozer. Tozer noted that that in the past the agency did not lose sleep over large MSR transfers because up until three years ago the nation’s megabanks were buyers of MSRs. “We knew they had the financial strength to make the P&I [principal and interest] payments” to the MBS investors, he said. But with nonbank servicers, such as Green Tree, Nationstar Mortgage, Ocwen Financial as well as PennyMac, rapidly growing their portfolios, the agency is ...

The Consumer Financial Protection Bureau will launch a new, voluntary pilot project later this year to promote e-closings as a way to reduce or eliminate many of the “pain points” associated with the mortgage closing process. But officials at FHA and Ginnie Mae were eager to jump on board and reinvigorate similar efforts of their own in this regard, as many government and industry representatives tried to capitalize on a renewed sense that e-mortgages and a greater use of technology can transform the entire origination process – for all stakeholders, not just consumers. “We’re very excited to see the continued advancement of not only the use of technology, but hopefully more effective means of working together as an industry to improve the overall mortgage process,” said FHA’s Patricia McClung, acting director of single family program development, at a public forum ...

HUD Secretary Shaun Donovan said this week that housing finance reform can no longer be put off, but no more so than for the FHA which continues to play an “outsized role” in the mortgage market as private capital remains on the sidelines. Speaking in New York at an event co-hosted by the Bipartisan Policy Center, Donovan said the Obama administration is squarely behind the legislative proposal by Senate Banking, Housing, and Urban Affairs Committee Chairman Tim Johnson, D-SD, and Ranking Member Mike Crapo, R-ID. “Despite its imperfections, does this bill represent progress? Absolutely,” said Donovan, seeking to win over housing advocacy groups disenchanted with the bill. “When looking for ways to improve [the bill], let’s not lose sight of its potential. Let’s not forget its importance to the housing market and its future.” The Johnson-Crapo legislative proposal calls for a wind-down of Fannie Mae and Freddie Mac and creation of a ...

Home Loan Servicing Solutions recently completed its first acquisition of Ginnie Mae whole loans through the agency’s early buy-out (EBO) program. The purchase price for the FHA-insured loans was $556.6 million. HLSS acquired the loans from Ocwen with an unpaid principal balance (UPB) of $549.4 million. Ocwen initially acquired the loans through the GNMA EBO program, which allows Ginnie Mae servicers to purchase delinquent loans from applicable loan securitization pools. HLSS financed its purchase by opening a new $600 million mortgage loan facility. It received $472.7 million in proceeds from this facility to help fund its EBO loan purchase from Ocwen. The loans are held as investments in a special purpose entity (SPE). “It is our expectation that since our GNMA EBO loans are insured by the FHA, the cash flows of this SPE will be sufficient to meet all claims of the debt holders,” the company said ...