FHA jumbo loan originations increased in the first quarter of 2013 as well as from the same period last year pending hikes in the mortgage insurance premium and the required downpayment on loans above $625,500, according to Inside FHA Lending’s analysis of FHA data. FHA jumbo lenders produced an estimated $5.44 billion in loans over $417,000 during the first three months of the year, up 6.6 percent from the fourth quarter of 2012 and 14.0 percent higher compared to the volume from a year ago. Consumers continued to use the FHA jumbo product despite FHA’s decision to raise the annual mortgage insurance premiums on ... [2 charts]

Ginnie Mae officials have moved beyond whether they should consolidate the agency’s two MBS programs to how they should do it, but it remains much less certain that similar proposals to restructure the Fannie/Freddie market will take root. The newer Ginnie II MBS program has become significantly more popular than the original Ginnie I security, both in terms of new issuance and the outstanding supply of securities. Speaking at the Mortgage Bankers Association secondary market conference in New York this week, Ginnie President Ted Tozer said...

As more firms contemplate issuing jumbo MBS, there are growing concerns that there could be a few speed bumps along the way, namely rising whole loan prices, and an increase in the cost of money for investors that use swaps to fund their purchases of the AAA-rated tranches. The increase in whole loan prices is less of a concern, because it was somewhat anticipated given the “hot” nature of the market. Over the past few months, prices for jumbo whole loans have risen to as high as 103, compared to 101 and 102 last year. Craig Cole, a jumbo consultant and a former top production manager at Union Bank, San Francisco, told...

Standard & Poor’s was the most active rating service in the non-mortgage ABS market during the first quarter of 2013, according to a new Inside MBS & ABS analysis, while DBRS continued to dominate the non-agency MBS space. S&P rated a total of $31.9 billion of newly issued ABS during the first three months of the year, or 67.8 percent of total issuance. That was up from the company’s 58.1 percent share of ABS ratings for all of 2012. S&P was particularly strong in rating credit card ABS, covering 86.1 percent of that market after grading just 50.3 percent of last year’s card deals. Because nearly all public deals have multiple ratings, the sum of the ratings by firms exceeds...[Includes two data charts]

One of the things that is unusual about this housing recovery is the extent to which it has been supported by investors – and not just individuals looking for rental property. Institutional investors have jumped into the rental home market in a way not seen before, and that is benefitting some industries you might not expect, or in ways you may not have anticipated. “In traditional housing recoveries, individuals and households provide the bulk of the demand the market needs to rebound,” said ...

Two months ago, if you asked a broker of mortgage servicing rights how the market was doing, he would have said “decent.” But today, it’s a different story with the words “great” and “hot” getting muttered frequently. Over the past 60 days, several large flow and bulk MSR deals have been sent out for bid, many of which have been non-legacy offerings. Sellers are more willing to part with new MSR packages, product that is deemed to be of the highest quality with little chance of prepaying thanks to the ultra-low interest rates of today. And just how hot is the market? Interactive Mortgage Advisors, Denver, is wrapping up...

Fannie Mae, Freddie Mac and Ginnie Mae pumped out a respectable $152.3 billion in new single-family MBS in April, according to a new Inside MBS & ABS market analysis and ranking. April’s issuance level was up 2.6 percent from March and reversed, at least temporarily, a two-month downturn in new production. The cyclical peak for the agency MBS market came back in November 2012, when a whopping $199.4 billion in new securities were issued. Although the market couldn’t sustain...[Includes one data chart]

Standard & Poor’s, along with Moody’s Investors Service, last week settled a lawsuit involving their pre-financial crisis securities ratings before it got to a jury trial, but S&P suffered a setback with another ratings challenge lawsuit brought by Connecticut state officials. Experts predict a pickup in MBS litigation ahead of pending filing deadlines for legal challenges. S&P and Moody’s reached the confidential settlement with a group of 14 plantiffs led by Abu Dhabi Commercial Bank and King County, WA. Abu Dhabi and the over investors filed suit in 2008 and 2009 in Manhattan federal court claiming that the defendants misled them by allegedly inflating ratings on two structured investment vehicles they purchased. By settling the investors’ lawsuit, which claimed $638 million in losses, S&P and Moody’s were able...

Issuance of securities backed by servicer advance receivables has increased significantly recently and is expected to continue to grow, fueled by nonbank servicers and demand from investors. However, analysts at Standard & Poor’s warn that servicers are increasing their use of unconventional features and product types, which could increase risks for investors. S&P rated $7.8 billion in servicer advance securities from the second quarter of 2012 through the end of the first quarter of 2013, up from $7.7 billion from the two-year period ending in the first quarter of 2012. S&P said issuance is expected to increase as more and more servicing assets trade hands and servicers use securitization to fund their collateral acquisitions. Recent issuance has been driven...

While originations included in non-agency jumbo mortgage-backed securities in recent years have been of high-quality, significant differences exist among originators, according to a new analysis by Inside Nonconforming Markets. The average credit score on mortgages included in Redwood Trust’s non-agency jumbo MBS from 2011 through the first quarter of this year was 771.2, largely driven by First Republic Bank, which accounted for 47.0 percent of originations securitized by Redwood ... [Includes two data charts]