Purchase-mortgage lending exceeded refinance production for the first time in five years during the fourth quarter of 2013, according to a new Inside Mortgage Finance ranking and analysis. The shift has been in the works for some time as the potential refinance market began to shrink when interest rates rose late in the second quarter of last year. Mortgage lenders originated an estimated $168 billion of purchase mortgages during the fourth quarter of 2013, accounting for 55.1 percent of total originations. The last time purchase mortgages comprised more than half of new production was back in the fourth quarter of 2008. But purchase-mortgage originations fell...[Includes three data charts]

Speculators, in the form of “short-sellers,” are zeroing in on the mortgage industry, including some of the fastest-growing servicers of the past two years: Nationstar Mortgage, Ocwen Financial, and Walter Investment Management Corp. But one mortgage stock being shorted more than any of these is PHH Corp., the parent company of PHH Mortgage, the nation’s seventh largest originator. According to figures compiled by Standard & Poor’s, as of early February, speculators had sold short 17.2 million shares of PHH common. As a ratio of shares outstanding in PHH, this comes...[Includes one data chart]

New production of single-family agency MBS in January 2014 fell to its lowest monthly volume in five years, according to a new market analysis and ranking by Inside MBS & ABS. Fannie Mae, Freddie Mac and Ginnie Mae generated a total of $67.82 billion in single-family MBS last month, a 10.4 percent drop from December 2013. It was the weakest monthly issuance since January 2009, when $64.39 billion of new agency MBS were produced as world financial markets tried to recover from collapse. Market conditions – if you don’t consider the weather outside – were...[Includes one data chart]

Credit Suisse late last week broke a two-month lull in jumbo MBS issuance, and JPMorgan Chase appears to be planning a new security. However, the jumbo MBS market is far from flourishing as other issuers continue to avoid the sector. Credit Suisse issued a $287.42 million jumbo MBS last week. CSMC Trust 2014-IVR1 received a AAA rating from DBRS with credit enhancement of 6.85 percent on the top-rated tranche. The deal had...

The new judge presiding over Bank of America’s $8.5 billion settlement with MBS investors this week countermanded, for the moment, last week’s approval of the deal by her predecessor, giving a major opponent of the agreement another chance to argue against it. New York State Supreme Court Justice Saliann Scarpulla agreed to delay approval of the deal until at least Feb. 19 to hear American International Group’s appeal. Last week, Justice Barbara Kapnick approved the settlement agreement, except for loan modification claims, as one of her last acts before she took a promotion to the state’s Appellate Division. BofA agreed...

The mortgage market is just one month into the world of qualified mortgage lending under the Consumer Financial Protection Bureau’s ability-to-repay rule. But behind the scenes, investors, legal advisors and technology vendors are working to get ready to enter the non-QM space. “I can tell you, at least from the investor side, from the number of investors that I talk to – and some of these are cradle-to-grave guys that have originating arms in their organizations, or maybe correspondent networks for which they’re buying – they are building infrastructure and capability to process and buy these non-QM type loans,” said Dave Hurt, vice president at CoreLogic. “So there is genuine interest and significant enough confidence that there will be a market that they’re making investments both in technology and infrastructure to do that.” And it’s not...

Investors hoping to cash in on some of the huge returns realized by speculators in legacy nonprime MBS likely have missed the boat. Moreover, principal reductions on the remaining underlying loans are now deemed a credit negative. Trading in on vintage non-agency securities has been light of late. According to a recent report from Bank of America Merrill Lynch, the rally in such securities “has reached the ninth inning.” BAML notes...

More homebuyers opted for adjustable-rate mortgages as interest rates increased during 2013, although most of these loans remain in portfolio. ARMs accounted for 11.7 percent of mortgage originations in the third quarter of 2013, according to Inside Mortgage Finance, up from a share of 9.8 percent in the third quarter of 2012. Quarterly originations of ARMs have stayed relatively steady in recent years and hit $54 billion in the third quarter of 2013. But ARMs remain relatively rare in [Includes two data charts]

Two pages of data showing the top 30 sellers of agency mortgages in 2013 with a break-out for each lender listing average credit scores, debt-to-income ratios, loan-to-value ratios, loan size, purchase-mortgage share and refinance share. All characteristics are shown for the origination channel (retail, correspondent and broker) at each lender.

Nonbank mortgage servicers continued to grow their portfolios during the fourth quarter of 2013, as market stalwarts pulled aside and gave them room to accelerate, according to a new market analysis and ranking by Inside Mortgage Finance. Nine nonbank companies ranked in the top 30 mortgage servicers as of the end of last year, and they held an estimated $1.69 trillion in mortgage servicing. Several of the top nonbank lenders have not yet reported fourth-quarter earnings, and the group’s total servicing could be higher as more data come to light. Moreover, most of the nonbanks have pipelines of pending bulk and flow acquisitions, meaning they will continue...[Includes one data chart]