Nonbank loan administrators expanded their share of the mortgage servicing market during the second quarter, mostly capturing agency business abandoned by large banks, according to a new ranking and analysis by Inside Mortgage Finance. Commercial banks, savings institutions and credit unions reported a combined single-family servicing portfolio of $6.930 trillion as of the end of June, according to call reports. That was down 0.5 percent from the previous quarter despite the fact that the total depository portfolio holdings of unsecuritized mortgages increased 1.7 percent during that period. But bank, thrift and credit union loan servicing for others – typically loans held in mortgage-backed securities trusts – fell...[Includes two data tables]

Bank of New York Mellon has expanded its servicing oversight business by looking beyond the shrinking non-agency MBS market. The company recently started handling reporting duties for many small servicers on mortgages serviced for the government-sponsored enterprises. For 25 years, BNY Mellon has been a master servicer on non-agency MBS. The role involves oversight of primary servicers. BNY Mellon’s master servicing portfolio for non-agency MBS has declined along with the total amount of non-agency MBS outstanding. The firm handled...

An increase in interest rates will help boost originations of non-agency nonprime mortgages, according to panelists at a webinar hosted by Inside Mortgage Finance this week. Higher interest rates will make it less attractive for prime borrowers to refinance, which could force lenders to look for volume elsewhere, including the nonprime market. Purchase mortgages account for a large share of the nonprime loans originated in recent years and higher interest rates could also increase nonprime mortgages aimed at debt consolidation. Matthew Nichols, CEO of Deephaven Mortgage, said...

The first rated post-crisis non-agency MBS backed by a significant share of nonperforming mortgages paid off recently, offering insights into how the deal performed and how investors fared. The $372.80 million Mortgage Fund IVc Trust 2015-RN1 was issued by Bayview Asset Management in October 2015. It received “A” ratings from Fitch Ratings and Morningstar. Fitch said it capped its rating “due to the idiosyncratic and adverse-selection risks associated with NPL collateral.” At issuance, 34.9 percent of the loans were nonperforming and 78.0 percent had been modified. The rating services said...

The next mortgage-backed security from Lone Star Funds backed by new nonprime originations will be larger than the deal it issued in June, according to presale reports published this week. The planned $216.97 million COLT 2016-2 will be the largest MBS backed by post-crisis nonprime originations, topping the $161.71 million COLT 2016-1. The MBS scheduled to close next week differs in some ways from the previous MBS from Lone Star. The firm’s Caliber Home Loans ...

A number of non-agency lenders are looking to originate mortgages for investment properties using a debt-to-income ratio based on income from the property rather than the borrower’s income, according to Moody’s Investors Service. “Using property DTI underwriting on loans secured by single investment properties introduces risks stemming from the lack of visibility on a borrower’s other debt obligations relative to a steady source of income that lenders can ...

A $6.20 billion portfolio backed largely by jumbo mortgages originated in recent years was sold last week, according to Interactive Data. The portfolio appears to have been sold by Premium Point Investments, though the hedge fund wouldn’t confirm that. Premium Point backed WinWater Home Mortgage, which stopped issuing jumbo mortgage-backed securities earlier this year. Impac Mortgage Holdings announced this week an offering of 2.5 million shares ... [Includes two briefs]

The new nonprime mortgage-backed securities deals from Angel Oak Capital Advisors and Deephaven Mortgage contain a number of mortgages reflecting a range of issues in terms of complying with the CFPB’s TILA/RESPA Integrated Disclosure rule (TRID), a review of the offering documents revealed. Part of the compliance issues stem from the ongoing uncertainty about cures for minor errors. While the CFPB issued a proposed rule in July attempting to clarify some of these TRID uncertainties, and the Structured Finance Industry Group has worked with industry participants on a set of guidelines, it is still not clear whether some TRID errors can be cured. The $132.65 million nonprime MBS from Angel Oak included 251 mortgages subject to TRID, representing 59.4 percent ...

Real estate investment trusts that specialize in residential MBS posted a slight increase in their agency MBS holdings during the second quarter of 2016, along with a drop in non-agency MBS. The 16 publicly traded mortgage REITs tracked by Inside MBS & ABS had a combined residential MBS portfolio of $234.65 billion at the end of June, a gain of 0.9 percent from the previous quarter. However, 11 of the institutions reported declining balances, including the two largest REITs at the top of the ranking. Two Harbors Investment reported...[Includes one data table]

Over the past week, two nonprime MBS deals came to light: a $138.89 million bond issued by Deephaven Residential Mortgage Trust and a $119.38 million security from Angel Oak Real Estate Investment Trust. Both deals were private placements backed by newly originated mortgages and underwritten by Wall Street veterans Credit Suisse and Nomura Securities. Although both were publicized this week, the transactions – which were not rated – closed...