Lenders have loosened downpayment requirements on conforming purchase-mortgages as part of a shift that typically occurs when the purchase market rebounds. The move toward higher loan-to-value ratios on purchase mortgages has been gradual, but industry analysts suggest it’s part of an effort by lenders to increase volume. “As lenders need more mortgage volume, average downpayments start to drop,” said Doug Lebda, CEO of LendingTree. “More lenders are beginning to loosen their guidelines and are going after a slightly broader pool of potential borrowers.” According to the Inside Mortgage Finance MBS Database, the original LTV ratio for newly originated purchase mortgages included in mortgage-backed securities issued by the government-sponsored enterprises has...

A large decline in interest rates in the past year created millions of refinance opportunities for lenders, according to industry analysts. However, prepayment risk on MBS backed by Fannie Mae, Freddie Mac and Ginnie Mae appears to be decreasing as interest rates increase. As of the end of April, 7.0 million borrowers were likely to both qualify for and benefit from refinancing, according to Black Knight Financial Services. That was up from 4.5 million potential refi borrowers a year ago as interest rates on 30-year fixed-rate mortgages declined by 70 basis points in that time, according to Freddie’s Primary Mortgage Market Survey. “This is...[Includes one data table]

Angel Oak Mortgage Solutions was hoping to make a big splash this year by being the first lender to securitize newly originated nonprime mortgages since the housing bust. It now appears those plans are on hold. According to officials who said they have been briefed on the situation, the Atlanta-based Angel Oak is now shopping around a roughly $100 million package of nonprime loans, many of which were originated over the past year. One investor said...

There is good news for investors in private student-loan ABS these days, according to the latest market intelligence from industry analysts. Student loan performance was healthy in the first quarter, and more growth is expected going forward. Continued strong performance trends were seen in repayment, delinquencies and charge-offs for private student loans through March 31, 2015, according to the semi-annual private student-loan performance report from MeasureOne, which was released earlier this week. Among the key findings, year-over-year delinquencies continued...

The dreary state of the prime jumbo mortgage securitization market will continue for the short term but there’s a silver lining around the bend, according to an analysis by rating agency DBRS. Despite last year’s downturn, the jumbo prime market has seen steady growth in the last five years. In 2010, Sequoia Mortgage ended the drought in the non-agency MBS with a $478.1 million deal backed by newly originated prime jumbo loans. There have been...

Citadel Loan Servicing this week rolled out something the residential market hasn’t seen in quite some time: a nonprime second lien from a nonbank. But don’t expect a groundswell of copycat loans. Moreover, it’s doesn’t appear that Citadel’s bold move is likely to ignite the return of nonbanks to producing second liens of any type – whether it’s a closed-end second or a line of credit. Anecdotal evidence suggests...

The pending TILA/RESPA Integrated Disclosure (TRID) rule from the CFPB is going to raise the risk of losses for investors in U.S. residential mortgage-backed securities, according to a new report from Moody’s Investors Service. Currently, as Moody’s points out, RMBS trusts are liable for lender errors in calculating the finance charge, the annual percentage rate (APR) and certain other disclosures required by the Truth in Lending Act. However, they are not liable for errors on itemized settlement charges and other disclosures required by the Real Estate Settlement Procedures Act. Further, under the current regime, TILA and RESPA each require lenders to deliver both an initial and a final disclosure to consumers. “Whether an assignee can be liable for lender errors ...

JPMorgan Chase and Credit Suisse are coming to market with separate jumbo mortgage-backed securities that have some sharp differences in terms of collateral. The $379.78 million JPMorgan Mortgage Trust 2015-3 includes some unique characteristics such as a handful of loans with combined loan-to-value ratios above 80.0 percent and some interest-only mortgages. While the average combined LTV ratio for mortgages to be included in the deal is 69.9 percent, 15 mortgages ...

The Department of Veterans Affairs has issued a policy clarifying that VA lenders must treat veterans in same-sex or opposite-sex marriages equally and fairly when processing and underwriting their home-loan applications. The policy is effective immediately. Under the new policy announced on May 19, the VA will process all claims and applications involving same-sex marriages in the same manner as claims and applications based on opposite-sex marriages, “without any additional scrutiny or development.” Language on VA forms, web pages and other VA communication materials will be revised to ensure that all veterans, VA program administrators and personnel are aware of the equal-treatment policy. The new instructions require VA lenders to accept a claimant’s or an applicant’s assertion of ...

New entrants in the Ginnie Mae issuer community expand access to credit at lower cost, deepen the market for Ginnie mortgage servicing rights and help address the agency’s “too-big-to-fail” issue, said the agency’s top executive. “Our top concern is that issuers have the operational and financial strength to meet issuer/servicer obligations,” Tozer said during the recent secondary market conference sponsored by the Mortgage Bankers Association. The flood of new nonbank issuers into the program has been well documented. While they have diluted the heavy concentration of business in the hands of a few megabanks, many have complex financial structures that are less tested in the marketplace, he said. The pipeline of issuer applicants has dropped dramatically, the Ginnie executive reported. To get approved, an applicant has to show where the cash will come from to ...