The latest jumbo mortgage-backed security from Redwood Trust includes some differences compared with the two jumbo MBS the firm issued earlier this year. The $343.16 million deal includes loans from many lenders and contributions from a Federal Home Loan Bank program. Sequoia Mortgage Trust 2016-3 received preliminary AAA ratings from Kroll Bond Rating Agency and Moody’s Investors Service. The MBS will include...

Nonbanks crossed a threshold in the third quarter of 2016, posting a hefty 6.3 percent increase in their combined Ginnie Mae servicing portfolio, according to a new Inside FHA/VA Lending analysis. Nonbanks serviced $826.6 billion of Ginnie single-family mortgage-backed securities as of the end of September. That represented 51.3 percent of the total Ginnie market. The nonbank servicing total includes a small amount of Ginnie servicing held by state housing finance agencies, roughly 1.0 percent of the entire market. But it doesn’t include the significant amount of Ginnie servicing that nonbanks do as subservicers for both depository and nonbank clients. Interestingly, the biggest gain for nonbanks in percentage terms came in servicing VA loans, which rose 8.1 percent from the second quarter to $252.1 billion, or 51.0 percent of the market. The VA sector is one business from ... [4 charts ]

Fannie Mae and Freddie Mac saw a robust 29.7 percent jump in single-family mortgage business during the third quarter, with most of the gain coming from the purchase-mortgage side of the business. And more purchase-mortgage business usually means a bigger share for correspondent lenders. Correspondent originations accounted...[Includes two data tables]

Ginnie Mae rode a surging purchase-mortgage market and heavy refinance activity to new production records during the third quarter of 2016. The agency issued a whopping $145.14 billion of single-family mortgage-backed securities during the third quarter, according to an Inside FHA/VA Lending analysis of MBS disclosures. That figure is based on pool-level disclosures that reveal exact principal balance amounts and it includes securities backed by FHA home-equity conversion mortgages. The data in the table below are based on truncated loan-level disclosures and do not include HECM activity. New Ginnie MBS issuance in the third quarter was up 15.7 percent from the previous quarter. Ginnie MBS production set three consecutive monthly records during the third quarter, culminating in a huge $52.46 billion month in September. Purchase-mortgage activity was the key driver, but the ... [ 4 charts ]

Requiring an undercapitalized issuer to repurchase uninsured performing mortgages out of a mortgage-backed securities pool could increase risk to the federal government, warned Ginnie Mae. Responding to an adverse audit report from the Department of Housing and Urban Development’s Office of the Inspector General, Ginnie said that while it generally accepts the IG’s recommendations, forcing an undercapitalized issuer to buy out performing loans and either hold them in portfolio or sell them at a substantial loss would put the government at greater risk. “This is something we need to be alert to in certain cases,” the agency said. According to the report, Ginnie improperly allowed more than $49 million of single-family mortgages with terminated insurance to remain in its MBS pools for more than one year without obtaining FHA coverage. The IG warned Ginnie could be on the ...

Ginnie Mae FY 2016 Highlights. “So far, we’ve pretty much broken every record,” said a Ginnie Mae spokesperson. Total mortgage-backed securities issuance for FY 2016 was $490.3 billion, “an all-time high by a pretty wide margin,” according to the spokesperson. September MBS issuance was also at an all-time high: $54.8 billion. Ginnie Mae commitment authority for the fiscal year was $430.2 billion. Approximately 2.3 million mortgage loans worth $462 billion underlay Ginnie’s single-family MBS pools in FY 2016. Of this total, $278 billion (1.4 million loans) were purchase mortgages, and $184 billion (0.9 million loans) were refinances or modified loans. Of the purchase dollar volume, first-time homebuyers accounted for $200 billion (1.1 million loans). Of the $462 billion single-family MBS pools, FHA accounted for 57.1 percent ($264 billion), VA, 38.8 percent ($179 billion), and rural housing loans, 3.9 percent ($18 billion). New California Law Protects Spouses of HECM Borrowers from ‘Widow Foreclosure.’ On Sept. 29, 2016, California Gov. Jerry Brown, D, signed Senate Bill 1150 into law to protect widows, widowers and other heirs of mortgage borrowers from unnecessary foreclosures.

Fannie Mae and Freddie Mac securitized $135.69 billion of single-family purchase mortgages during the third quarter, according to a new Inside Mortgage Finance analysis of mortgage-backed securities disclosures by the two government-sponsored enterprises. That was up a hefty 26.2 percent from the previous quarter, and it represented the biggest quarterly flow of purchase mortgages to the GSEs since the housing market collapse. Although the loans were pooled in MBS issued during the third quarter, a significant number of them were actually originated during the April-June cycle. The third quarter typically has...[Includes three data tables]

Continued increases to home prices along with low interest rates have prompted a number of borrowers to take cash out when completing a refinance. Some 41.0 percent of refinances completed in the second quarter of 2016 resulted in a loan amount at least 5.0 percent higher than the unpaid principal balance of the original loan, according to Freddie Mac. In the second quarter of 2015, the share was 33.0 percent and between 2010 and 2013 it typically ranged from 15.0 percent to 20.0 percent, according to Freddie. The total amount of home equity cashed out has also increased...

A boom in ABS backed by unsecured consumer loans requires closer scrutiny, according to analysts at Fitch Ratings. Marketplace lenders have boosted the issuance of such ABS in recent years, though the rating service warned that deal performance is difficult to predict. “Many firms in this space have legitimate value propositions and apparent technological advantages,” Fitch said. “However, they have yet to prove their underwriting merit.” Since September 2013, at least 31 ABS totaling $4.60 billion backed by consumer loans from marketplace lenders have been issued...

The effort by some non-agency MBS investors to create an entity to protect investors took a step forward as a sample deal-agent agreement was circulated late last week in advance of the ABS East conference in Miami. A deal agent would be tasked with protecting the interests of investors in non-agency MBS, including duties of care and loyalty. The leaders of the effort, James Callahan, a principal at Pentalpha Global and Alessandro Pagani, head of securitized assets at Loomis Sayles & Company, said the market should adopt the agreement as the template for new non-agency MBS. However, the sample agreement leaves...