While a number of jumbo lenders reduced their reliance on mortgage brokers in the years after the financial crisis, Primary Capital Mortgage has sourced a large share of its production from brokers. And the lender has earned strong assessments from rating services in the process. Moody’s Investors Service said 71 percent of the jumbo mortgages PCM originated between the second quarter of 2014 and the first quarter of 2015 were through brokers. The lender originated $114 million in jumbos in that span. The majority of PCM’s originations are agency mortgages. The rating service said...

Questions from Inside Nonconforming Markets prompted the Consumer Financial Protection Bureau to acknowledge last week that its director misspoke during a speech at the Mortgage Bankers Association’s annual convention. In arguing that the CFPB’s ability-to-repay rule hasn’t caused a significant reduction in mortgage originations, Richard Cordray said last week that “most” jumbo loans are non-qualified mortgages. While comprehensive data on the non-QM share of jumbo mortgages is not available, a number of data sources suggest that most jumbos are in fact QMs, not non-QMs. Three of the five largest jumbo lenders told...

A typical jumbo mortgage-backed security is stronger in many ways than the non-agency MBS-like transaction Freddie Mac issued at the end of July, according to a recent analysis by Andrew Davidson & Co. However, the Freddie deal benefitted from a wrap provided by the government-sponsored enterprise. Freddie Mac Whole Loan Securities Trust Series 2015 SC01 was backed by mortgages with an unpaid principal balance of $302.96 million. The risk-sharing transaction was structured as a cash securitization with $278 million in senior certificates guaranteed by Freddie and approximately $23 million in unguaranteed subordinate certificates. Andrew Davidson compared...

Citadel Loan Servicing, Irvine, CA, one of the most active nonprime residential lenders in the market, is on track to fund a company-record $400 million worth of mortgages this year, more than double what it produced last year. In a brief interview with Inside Nonconforming Markets this week, company founder and CEO Dan Perl said his goal for next year is $1 billion – all in loans that do not meet the qualified-mortgage standard. If the privately held Citadel – Perl is the chief shareholder – can hit...

Parkside Lending’s insurance subsidiary recently became a member of the Federal Home Loan Bank of Cincinnati. Parkside said access to FHLBank advances will help provide leverage to Parkside Mortgage Trust, a real estate investment trust. Officials at Parkside wouldn’t address the amount of advances PSL Insurance Company will have access to or whether the advances will help fund originations of non-agency mortgages. In addition to conventional conforming offerings, Parkside originates non-qualified mortgages. Resitrader recently launched...[Includes four briefs]

The unpaid principal balance on VA loans securitized in 3Q15 Ginnie Mae mortgage-backed securities totaled $426.9 billion, up 5.1 percent from the previous quarter and 17.3 percent more year-over-year. Wells Fargo serviced $114.4 billion of VA collateral at Sept. 30, 2.0 percent up from the prior quarter. It was good enough for a commanding 26.8 percent of the market. The only other megabank among the top five servicers in this segment was fifth-place Chase Home Finance, which closed the quarter with $16.8 billion and a 3.9 percent market share. It saw portfolio declines on both quarterly and year-over-year bases. USAA Federal Savings Bank, in third place, accounted for $24.1 billion, or 5.6 percent of the VA-backed MBS servicing market. Nonbanks PennyMac, in second place, and fourth-ranked Freedom Mortgage combined for 11.0 percent of the ... [ 1 chart ]

Servicing of FHA loans pooled into Ginnie Mae mortgage-backed securities rose 2.1 percent in the third quarter of 2015. Three megabanks in the top five-servicer tier accounted for a significant share of the market. Ginnie Mae servicers of FHA collateral reported $969.0 billion outstanding at Sept. 30, with Wells Fargo accounting for 27.9 percent of total servicing volume. Wells Fargo, Chase Home Finance (#2) and Bank of America (#5) combined to service 39.3 percent of FHA outstanding as of the end of the quarter. PennyMac Corp. closed the quarter with a $57.7 billion FHA servicing portfolio, good enough for third place and 6.0 percent of the market. Fourth-ranked NationStar Mortgage reported a $53.6 billion servicing portfolio at the end of the ... [ 1 chart ]

Although most analysts and industry observers agree that the FHA cut in mortgage insurance premiums, effective in January, has resulted in stronger purchase volumes and credit availability, opinions vary as to whether another reduction is on the way. The FY 2014 independent actuarial audit of the FHA Mutual Mortgage Insurance Fund projected FHA’s total loan production in fiscal 2015 at $124 billion. With the FHA pricing adjustment, production is now expected to increase by 60 percent, with total production estimated at $200 billion by the end of the fiscal year, said Brian Chappelle, an industry consultant. As program fundamentals trend upward, Chappelle is...

Many independent mortgage companies that are relatively new to the mortgage servicing market are actively managing their portfolios in a constantly shifting environment, according to panelists at the annual convention of the Mortgage Bankers Association. The surprisingly cheap cost of retaining mortgage servicing rights during the 2012 bonanza led a number of nonbank lenders to start amassing MSR portfolios. It has become a valuable tool in managing cash flow and earnings in the volatile mortgage production market of recent years. Guild Mortgage is...

While federal regulators issued a final rule setting risk-retention requirements for a variety of MBS and ABS in December 2014, uncertainty regarding implementation persists. Industry participants are seeking guidance from regulators on a variety of issues, including the application of risk retention to asset classes that weren’t prevalent when the Dodd-Frank Act was drafted. “It’s absolutely astonishing how much becomes unclear when you actually sit down to build a risk-retention solution,” Rick Jones, chair of finance and real estate groups at the Dechert law firm, said in a recent commentary. He noted...