Wells Fargo fell a notch as PennyMac raced to the top to become the leading VA jumbo securitizer for the first quarter of 2017 – a period in which VA jumbo loan securitization took a sharp nose dive. The volume of VA jumbo loans securitized during the first three months plunged 36.8 percent, compared to the meager 2.0 percent decline seen in the fourth quarter. The drop reflected a 32.9 percent drop in jumbo mortgage production during the first quarter, along with similar large drops in virtually every product segment in the mortgage market, according to an analysis by Inside FHA/VA Lending affiliate Inside Mortgage Finance. The agency jumbo market was down 39.1 percent from the fourth quarter despite the bump up in high-cost loan limits to $636,150, an increase of $10,650 that became effective in January. All components of the agency jumbo market took big hits in the first quarter, including ... [ Charts ]

Issuance volumes in various MBS and ABS sectors are generally below pre-crisis levels and liquidity in the markets is adequate, according to an analysis by the Financial Industry Regulatory Authority. But the structured finance sector hasn’t flourished as the corporate bond market has in recent years, according to FINRA. The non-governmental regulator of broker-dealers based its analysis in part on data collected by its Trade Reporting and Compliance Engine, which tracks trades in a variety of asset classes. The analysis was completed by FINRA’s Office of the Chief Economist. “Market liquidity [for MBS and ABS] seems...[Includes one data table]

The development of a deal agent for new non-agency MBS has spanned years, with industry participants working toward the best way to compensate the new transaction party, among other issues. A deal agent would have a fiduciary duty to investors, oversee enforcement of representations and warranties, and monitor various participants in a security. The new role is significant because some major investors say that after suffering major losses on MBS issued before the financial crisis, a deal agent is required for them to buy new securities. Clayton Holdings was...

Securitization rates appeared to rebound strongly in the first quarter of 2017, with an estimated 79.5 percent of primary-market mortgage originations finding their way into a variety of MBS, according to a new Inside MBS & ABS analysis. That’s up from a 69.1 percent securitization rate for all of 2016 and, if it keeps up for the rest of 2017, it would be the highest mark since 2013. In the fourth quarter of 2016, the rate was 72.7 percent. Both new MBS production and primary-market originations were...[Includes one data table]

If you’re a mortgage banker hoping to issue Ginnie Mae securities, now may be a good time to apply: the list of pending applications is extremely short, as are the wait times. According to Gregory Keith, senior vice president and chief risk officer for the agency, there are now just nine pending applications, with two of those being circulated for final approval. Moreover, according to figures provided to Inside MBS & ABS, final approvals granted to banks and nonbanks have been...

Investors in nonprime MBS may be more vulnerable to fraudulent or defective mortgages compared to prime transactions because of deficiencies or inadequacies in the related representation-and-warranties frameworks, according to a new report from analysts at Moody’s Investors Service. “The collateral backing these transactions is riskier than the loans in post-crisis prime jumbo RMBS, which also generally use stronger frameworks,” the report said. For starters, “Transactions in the re-emerging non-prime RMBS sector are...

Marketplace lender Social Finance – a mortgage originator with a track record in securitizing consumer and student loans – has filed for a state bank charter in Utah and is also pondering selling stock to the public. For now, the privately held technology-centric firm isn’t saying much about its plans, including the initial public offering. One source familiar with the company’s mortgage operation said SoFi recently hired one executive away from a larger player by dangling the IPO and stock options. To date, there has been...

One of the most significant variables industry participants are working to address in terms of introducing a deal agent into non-agency mortgage-backed securities is the fee structure. Issuers are trying to balance paying for the services provided by a deal agent without diverting too much cash flow from investors in non-agency MBS. The fee structure will also play a key role in how rating services treat MBS that have a deal agent, with issuers looking for favorable treatment ...

Weeks after the Trump administration banned the practice, the Senate Judiciary Committee is looking into whether the Obama administration used mortgage-related settlement funds to funnel money to political organizations that Congress deliberately defunded. In a recent letter to Attorney General Jeff Sessions, Sen. Chuck Grassley, R-IA, chair of the Senate Judiciary Committee, revived a standing request to the Department of Justice for a list of all settlement agreements reached during the previous administration that involved alleged payments to partisan community organizations. He gave the agency until June 28 to respond to his request. Specifically, Grassley asked...

Ginnie Mae hit a milestone in the MBS market during the first quarter of 2017, edging past Freddie Mac to become the second-largest supplier of single-family MBS in the world. A new Inside MBS & ABS analysis reveals $1.705 trillion of Ginnie 1-4 family MBS outstanding at the end of March, a 2.2 percent increase in just three months. Meanwhile, outstanding single-family Freddie MBS rose 0.7 percent to $1.703 trillion. Both Ginnie and Freddie accounted...[Includes two data tables]