A healthy housing recovery boosted mortgage origination volume during the second quarter of 2014, but production remains at relatively sluggish levels, according to a new market analysis and ranking by Inside Mortgage Finance. Single-family mortgage originations totaled an estimated $295 billion during the second quarter, up 25.5 percent from the first three months of the year. The first quarter of 2014 was the worst production environment for the mortgage industry since the end of 2000, even falling below the mark set at the depth of the financial crises in the fourth quarter of 2008. In fact, the most recent April-to-June cycle brought...[Includes three data charts]

The first-time homebuyer share of home purchases has increased for four consecutive months, according to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. First-time homebuyer activity tends to increase through the spring homebuying season, but the first-time homebuyer share is at particularly high levels this year. First-time homebuyers accounted for 37.2 percent of home purchases in June, based on a three-month moving average. That was up from a 34.2 percent share in March, and the last time the first-time homebuyer share of home purchases was at 37.2 percent was September 2010. According to real estate agents, first-time buyers appear...

In the past two weeks, BlackRock has completed auctions of vintage non-agency MBS with a total unpaid principal balance of $8.1 billion. While the sales had the potential to push too much supply into the market, investor demand for the securities appears to have been strong. The market absorbed the first auction, for $3.7 billion in mostly subprime MBS from 2006, “without a hiccup,” according to analysts at Barclays Capital. Credit Suisse submitted winning bids on all of the non-agency MBS auctioned by BlackRock in the past two weeks, with most of the securities quickly being placed with other investors, indicating strong demand. Of the $3.7 billion in non-agency MBS auctioned last week, 96 percent of the balance was placed...

The modest rebound in non-agency MBS issuance during the first three months of 2014 fizzled during the second quarter of the year, according to a new analysis and ranking by Inside MBS & ABS. A total of just $1.60 billion of non-agency MBS were issued during the second quarter, a 62.7 percent decline from the previous period. It was the lowest quarterly volume in new issuance since the financial crisis of 2008. On a year-to-date basis, new issuance was...

Re-securitization activity is above levels seen last year because of compressed yields on vintage non-agency MBS, according to industry analysts. Re-securitizations – all of which are privately placed and typically without a rating – can offer investors more credit risk and leverage than vintage non-agency MBS. In the first half of 2014, 20 re-securitizations of real estate mortgage investment conduits totaling $5.90 billion were issued, according to Bank of America Merrill Lynch. Activity is picking up: June alone accounted for 28.3 percent of the issuance. “In an environment where yields have compressed in the vintage non-agency space, subordinate re-REMIC classes can offer...

As the Securities and Exchange Commission continues to consider how to reform the rating process for structured finance transactions, including non-agency MBS, industry analysts affiliated with the Brookings Institution suggested that the fix doesn’t require altering the issuer-pay model that has been in place for more than 40 years. Instead, the SEC should help establish transparent, numerical benchmarks, according to two industry participants, shifting away from the current system of letter-based ratings that are also used for corporate debt and sovereign debt. Ann Rutledge, a founding principal at R&R Consulting, a credit rating service, and Robert Litan, a nonresident senior fellow at The Brookings Institution, detailed their proposal in an economic study recently published by Brookings. “Securities that are rated only in an ordinal fashion – in order of likelihood of default – can be...

A significantly bigger Ginnie Mae would be placed in charge of all MBS issued with a government backing while Fannie Mae and Freddie Mac would be wound down and stripped of their government sponsorship under a bill filed last week by House Democrats. The legislation – the Partnership to Strengthen Homeownership Act, H.R. 5055, sponsored by House Democrats John Delaney (MD), John Carney (DE) and Jim Himes (CT) – has zero chance of gaining traction this year. It would create a new Ginnie Mae MBS backed by conventional mortgages that would have the full faith and credit of the federal government while tapping private capital to absorb some of the risk. The new structure under the Delaney-Carney-Himes bill would create...

The characteristics of mortgages included in jumbo mortgage-backed securities remained strong in the second quarter of 2014, according to a new analysis by Inside Nonconforming Markets. However, the high quality of jumbo MBS has not attracted enough investors to make issuance more appealing for banks than retaining the loans in portfolio. Debt-to-income ratios on loans included in the $1.03 billion in jumbo MBS issued in the second quarter averaged ... [Includes one data chart]

Redwood Trust revved up its latest jumbo mortgage-backed security in a hurry with plans to issue a new deal that includes some loans that don’t meet standards for qualified mortgages. The deal also includes less than 100 percent due diligence. The weighted-average loan age on the $306.05 million Sequoia Mortgage Trust 2014-2 is 1.4 months, according to Kroll Bond Rating Agency. The latest issuance from JPMorgan Chase included mortgages that were ...

Credit Suisse plans to issue a $367.84 million jumbo mortgage-backed security, according to a preliminary term sheet obtained by Inside Nonconforming Markets. The deal is scheduled to close around July 30. While presale reports on CSMC Trust 2014-IVR3 have not been issued, Credit Suisse expects that the deal will have credit enhancement of 7.25 percent on the AAA-rated tranches, according to the term sheet. Some 56 percent of the mortgages ...