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 ...

Freddie Mac will send $746 million to the U.S. Treasury under the conservatorship plan that siphons off nearly all the government-sponsored enterprise’s net profit every quarter, but that’s not all the cash being milked from the GSE. During the first quarter of 2015, Freddie sent $219 million to Treasury under the 2011 law that squeezed the GSEs to pay for a continuation of a payroll tax cut for U.S. workers. The levy is 10 basis points of guaranty fee charged by Freddie and Fannie Mae, and it’s a steadily rising amount as a greater share of GSE business is subject to the charge. In the first quarter of last year, Freddie paid...

While jumbo MBS issued in recent years have performed exceptionally well, some senior-support bonds on new jumbo MBS have credit risks similar to what was experienced during the financial crisis, according to analysts at Andrew Davidson & Co. In a recent analysis, Richard Ellson and Allison Ying raised concerns about the super-senior structures that have become common on jumbo MBS in recent years. They noted that when Redwood Trust started working to revive jumbo MBS issuance in 2010, the issuer used a much simpler structure. However, in the past few years, Redwood and many other issuers have increasingly used...

The new government-sponsored enterprise low-downpayment programs have met a mixed reaction among lenders. While some said they expect to see an uptick in mortgage activity, others noted the product accounts for just a small percentage of their firms’ business and won’t have much of an impact on origination volume. Fannie Mae’s low-downpayment program kicked off in December 2014, and Freddie Mac implemented its program in March 2015. So far, the volume of low-downpayment purchase loans in GSE business is relatively small. Fannie securitized...

Issuers continue to include super prime mortgages in jumbo MBS but credit enhancement levels on the latest batch of deals vary widely, with rating services raising concerns about participants with limited track records, among other issues. Presale reports have been issued for four jumbo MBS in April thus far: a $241.06 million deal from Two Harbors Investment, a $267.19 million MBS from Five Oaks Investment, a $356.45 million deal from Redwood Trust and a $273.62 million Credit Suisse securitization. The underwriting for mortgages backing these deals is...

Two new reports from Fitch Ratings, taken together, indicate a modest weakening in the collateral backing U.S. auto ABS deals is continuing, with perhaps a temporary reprieve thanks to short-term cash flow positives for consumers, mostly tax refunds and lower gasoline prices. Still, the overall outlook is positive. U.S. prime auto ABS collateral has been marginally weakening in the last few years, most recently because of amped-up competition among auto finance companies, Fitch said in a report out this week, based on transactions issued between 2007 and fourth-quarter 2014. “The quality of prime auto loan securitized pools was...

Overall non-agency MBS issuance dipped slightly in the first quarter of 2015, but the jumbo mortgage sector hit its biggest production volume since the financial crisis in late 2008, according to a new Inside MBS & ABS analysis and ranking. A total of $21.94 billion of non-agency MBS were issued during the first three months of this year, down 0.2 percent from the fourth quarter. The lion’s share of these deals were backed by seasoned loans, either ... [Includes two data charts]

High guarantee fees and loan-level pricing adjustments charged by Fannie Mae and Freddie Mac are not enough to counteract lingering MBS investor mistrust and draw private players back into the housing finance market, according to a top industry official. “The Federal Housing Finance Agency seems to believe that by raising costs for loans purchased or guaranteed by the government-sponsored enterprises, they can lure private sector capital back to the mortgage market ...