Caliber Home Loans was assessed by Moody’s Investors Service as an originator of “expanded-credit” mortgages last week. Caliber is the first lender to receive a rating from Moody’s for expanded-credit mortgages, which could pave the way for the first rated non-agency mortgage-backed security that includes non-qualified mortgages. The rating service defined Caliber’s expanded-credit mortgages as non-agency mortgages that are not prime jumbo loans. Moody’s said ...

Kroll Bond Rating Agency warned recently that it might refuse to rate certain non-agency mortgage- backed securities subject to the TRID mortgage disclosure rule until the CFPB issues formal guidance.The rating service said it’s currently unclear whether certain corrections of errors under the bureau’s integrated disclosure rule will subject non-agency MBS investors to assignee liability. This is an issue that the Structured Finance Industry Group continues to work on, with SFIG also stressing that formal guidance from the CFPB is necessary. “In instances where these violations go un-corrected by an originator, KBRA believes the risks associated with TRID-eligible loans, in material concentration, become more significant and that KBRA may consider additional credit enhancement, applying a rating cap, or declining ...

Fannie Mae and Freddie Mac are not conducting loan-level reviews for compliance with the CFPB’s integrated disclosure, and that threatens investors in the pair’s future credit-risk transfer transactions with the possibility of some modest losses because of lender compliance violations, according to a recent report from Moody’s Investor Service. “We expect overall losses on these transactions owing to TRID violations to be fairly small, despite our expectations that the frequency of violations will be high, at least initially,” analysts at the rating service said. “Furthermore, lender representations and warranties and the government-sponsored enterprises’ ability to remove defective loans from the transactions will likely mitigate some of these losses.” Damages for TRID violations are less significant for a securitization transaction compared ...

Two rating services published reports in recent days stressing that non-agency MBS with loans subject to TRID mortgage disclosures can be rated, even when the loans have TRID violations. The reports are part of an industry effort to deal with the rule that combines disclosure requirements of the Truth in Lending Act and the Real Estate Settlement Procedures Act that was promulgated by the Consumer Financial Protection Bureau and took effect in October. Kroll Bond Rating Agency and Morningstar Credit Ratings published separate reports in the past week stating expectations that TRID will have a “limited” impact on non-agency MBS investors. A number of other rating services have made similar statements since TRID took effect, though that has done little to spur issuance. Only one non-agency MBS with TRID loans has been issued...

A single mortgage must meet nearly 150 requirements to achieve compliance with the TRID disclosure rule, according to a framework proposed by members of the Structured Finance Industry Group. Third-party due diligence firms will test loans for most of the TRID requirements, according to a draft of the TRID compliance review scope obtained by Inside Nonconforming Markets. Since the TRID rule took effect in October, due diligence firms have found widespread violations ...

Fitch Ratings revised its criteria for rating non-agency mortgage-backed securities backed by non-qualified mortgages last week. The new standards set the stage for Fitch to rate nonprime non-QM MBS. The new non-QM criteria from Fitch include expanded product assumptions for rating nonprime mortgages and loans to self-employed or non-wage-earning borrowers. When determining litigation liability, Fitch said it will make a distinction between non-QMs for “very high ...

Ginnie Mae issued $93.41 billion of single-family mortgage-backed securities during the first three months of 2016, an 8.6 percent drop from the previous quarter, according to a new Inside FHA/VA Lending analysis of loan-level MBS data, excluding FHA reverse-mortgage activity. Early 2016 was the slowest market in a year for Ginnie MBS production, though it still was stronger than most of the agency’s pre-2015 business. And issuance in the first quarter of 2016 was 17.0 percent ahead of the volume produced during the same period last year. The soft spot in the first quarter was FHA lending, especially purchase-mortgage activity. Issuers delivered $54.44 billion of FHA loans into Ginnie MBS during the period, a 12.1 percent drop from the fourth quarter, including a 15.0 percent decline in FHA purchase mortgages. Securitization of VA loans fell by a ... [4 charts].

Payments were improperly allocated among tranches of a $644.12 million non-agency MBS issued in November 2014 for about a year before being addressed, according to the firms that placed ratings on the deal. RPMLT 2014-1 Trust was issued by Credit Suisse’s DLJ Mortgage Capital and backed by re-performing mortgages. The payment problems appear to be tied to improper reporting by Rushmore Loan Management Services, the servicer of the MBS, and Wells Fargo Bank, the securities administrator for the deal. Fitch Ratings said...

Proposed standards drafted by due diligence providers for how to handle TRID mortgage disclosure issues could be finalized as soon as next week, according to the Structured Finance Industry Group. TRID compliance violations uncovered by third-party due diligence firms are seen as a major contributor to the slowdown in non-agency mortgage-backed security issuance since the Consumer Financial Protection Bureau’s TRID rule took effect in October. And some have suggested ...

Ginnie Mae securitization of jumbo mortgage loans with a VA guaranty rose significantly in 2015 despite a volume drop-off in the fourth quarter, according to Inside FHA/VA Lending’s analysis of agency data. Year-over-year results saw an almost 60 percent increase in Ginnie Mae mortgage securitization backed by VA jumbo loans. This was slightly dampened by 17.1 percent drop in VA MBS production in the fourth quarter from the previous quarter. All top-five VA jumbo securitizers – Wells Fargo, Freedom Mortgage Corp., PennyMac Corp., U.S. Bank, and Quicken Loans – reported significant drops quarter-over-quarter and year-over-year. Wells Fargo delivered a total of $5.0 billion in VA jumbo loans into Ginnie pools, making it the leading jumbo securitizer in that segment. This accounted for 17.7 percent of the market. Freedom Mortgage ended the year with $2.1 billion in ... [ Charts ]