FHA-insured jumbo lending fell slightly in the fourth quarter of 2016 although year-over-year results were a lot better. Production of conforming-jumbo purchase and refinance loans insured by the FHA slipped 0.9 percent in the fourth quarter, a slight bump on the way to an annual jumbo origination total of $26.9billion. Year-over-year, FHA jumbo production was up 5.6 percent from 2015. Conforming-jumbo loans represented 9.8 percent of FHA loans securitized last year, according to data compiled by affiliated newsletter Inside Mortgage Finance. Purchase mortgages comprised 64.9 percent of jumbo loans insured by FHA in 2016 and 98.7 percent were fixed-rate loans. Nonbanks comprised the top five FHA jumbo lenders. Wells Fargo, which closed the year with $423.8 million in FHA jumbo originations, was in sixth place. Quicken Loans led the field with $802.5 million of ... [ Charts ]

The top tier of mortgage producers gained some market share in 2016, but call-report data show that community banks continued to play a huge role in the primary market, according to a new analysis and ranking by Inside Mortgage Finance. The top 100 lenders produced a hefty $1.622 trillion in first-lien mortgages last year, including their correspondent and wholesale-broker programs. Although their production faltered by 2.5 percent in the fourth quarter, full-year volume was up 18.2 percent from 2015. Banks, thrifts and credit unions ended...[Includes two data tables]

Over the past six quarters, selling Ginnie Mae servicing rights has been a difficult task with buyers turning their noses up at the product, preferring instead to stay within the safe confines of deals tied to Fannie Mae and Freddie Mac loans. According to investment bankers interviewed by Inside Mortgage Finance, the Ginnie market for mortgage servicing rights has been problematic for two main reasons: the fear of lawsuits and sanctions tied to FHA lending, and fast prepayment speeds tied to FHA and VA streamline refis. But now that rates have risen – and mostly stayed that way – there are...

Mortgage lenders continue to gain share in the home-purchase market as investors and other cash buyers have become less prevalent and the supply of distressed properties declines. Some 562,000 new homes were sold in 2016, according to the Census Bureau and the Department of Housing and Urban Development. Mortgage financing was used for 95.0 percent of the sales, up from a 92.0 percent share the previous year. The cash share of new home sales hit...

Fitch Ratings was the most active provider of credit ratings for non-mortgage ABS and non-agency MBS in 2016, a new Inside MBS & ABS analysis reveals. Fitch edged out Standard & Poor’s in a busy ABS market, garnering a 54.8 percent share of rated transactions last year. The company boosted its ABS ratings business by 4.6 percent compared to 2015, based on dollar volume, nudging its market share up 1.9 percentage points. Fitch’s deepest penetration was...[Includes two data tables]

The average daily trading volume in agency MBS declined to $202.4 billion in February, one of the worst readings over the past six months, according to figures compiled by the Securities Industry and Financial Markets Association. In January, volume was a bit healthier at $229.8 billion, but that was before concerns began to mount about President Trump’s business agenda and how successful the new White House might be in rolling back regulations – financial and otherwise. As Inside MBS & ABS went to press this week, fears were...

Housing finance reform, especially if it weakens mortgage underwriting standards, could have a negative impact on private-label MBS as well as the government-sponsored enterprises’ credit risk-transfer transactions, according to a newly published report from Moody’s Investor Services. Analysts said that various reform proposals could reduce the influence that Fannie Mae and Freddie Mac have in the market and likely increase credit risk in new MBS in the short-term. Combined with a rising interest rate environment, such reform could have a credit-negative effect. Loan origination processes and the kinds of loans produced could become...

Wells Fargo, Deutsche Bank and the Royal Bank of Scotland have agreed to pay investors $165 million to resolve allegations of misrepresenting the quality of mortgage loans underlying securities issued by now-defunct subprime lender NovaStar Mortgage. The agreement was announced last week subject to approval by Judge Deborah Batts of the U.S. District Court for the Second District of New York, according to a report by Reuters. At issue is $7.7 billion in residential MBS delivered into various trusts and sold to investors, including pension funds, prior to the housing crash. A multi-employer union pension plan led by the New Jersey Carpenters Health Fund filed...

Last year was a decent enough year for the student loan sector, and so far this year, the space is looking dramatically more robust, according to analysts at the DBRS ratings service. New issuance so far in 2017 is more than twice that from the same period last year, with volume exceeding $4.5 billion, according to Jon Riber, a senior U.S. ABS ratings analyst at DBRS. “There are...

A proposal from a former high-ranking official at S&P Global Ratings to reduce incentives for rating shopping has been met with skepticism and resistance from officials at other rating services. Howard Esaki, the former global head of securitization research at S&P Global Ratings, and Lawrence White, a professor of economics, NYU Stern School of Business, recently published a proposal to reform the process for how rating services are selected to grade MBS and ABS. They said...