A new, somewhat atypical, non-agency mortgage-backed security from JPMorgan Chase includes a large share of non-qualified mortgages and no fixed-rate mortgages. JPMorgan Mortgage Trust 2017-5 is a $671.7 million deal that received preliminary AAA ratings last week from Fitch Ratings, Kroll Bond Rating Agency and Moody’s Investors Service. The first four deals from Chase this year largely stuck with QMs and included a fair amount of mortgages eligible for sale to the ...

Issuance of nonprime mortgage-backed securities picked up in November with new deals from Angel Oak Capital Advisors and Invictus Capital Partners. A $210.2 million MBS from Angel Oak is scheduled to close on Nov. 28 and a $253.1 million deal from Invictus closed last week. The deal from Angel Oak is the third nonprime MBS of the year from the firm and follows closely after a nonprime MBS from Deephaven Mortgage where Angel Oak contributed mortgages with an unpaid ...

Underwriting standards for subprime mortgages tightened somewhat in the third quarter, according to a survey by the Federal Reserve. One of the four banks surveyed by the Fed reported tightening underwriting standards for subprime mortgages in the third quarter while standards at the other three banks were unchanged compared with the previous quarter.The bankruptcy of the parent company of Ditech Financial is unlikely to have an impact on ... [Includes two briefs]

More than three years after standards for qualified mortgages took effect, investors in the non-agency MBS market appear to be getting more comfortable with products that fall outside its bounda-ries. JPMorgan Chase is preparing to issue a large MBS backed by non-QMs that’s similar to deals from several nonbank issuers.

Credit Suisse and MBIA Insurance Corp. continued their wrangling in New York state appellate court in a $235 million MBS securities lawsuit brought by the bond guarantor in 2009.

Issuance of expanded-prime non-agency mortgage-backed securities is heating up with a new participant in the market and a quick second deal from Redwood Trust. Ellington Financial is preparing to issue its first non-agency MBS, which will largely consist of non-qualified mortgages originated by LendSure Mortgage. Morningstar Credit Ratings and S&P Global Ratings assigned preliminary AAA ratings to the deal this week. “Ellington Financial’s ability to access the robust securitization markets ...

Redwood Trust increased its acquisitions of jumbo mortgages in the third quarter, helped by strong demand for jumbo mortgage-backed securities. The real estate investment trust acquired jumbos with a total unpaid principal balance of $1.50 billion in the third quarter, up 25.0 percent from the previous period and up 15.4 percent a year ago. Officials said spread tightening helped the REIT compete with banks for jumbos. In the third quarter, Redwood closed two super-prime jumbo MBS with ...

Nonprime lenders allow credit scores as low as 500 and loan-to-value ratios up to 90.0 percent, but new originations don’t typically reach such extremes. According to an analysis by Inside Nonconforming Markets, the average credit score on loans in nonprime/Alt A mortgage-backed securities issued in recent years was 701.1. The average combined LTV ratio for the loans was 74.9 percent and the average debt-to-income ratio was 37.0 percent. The analysis ... [Includes one data chart]

Members of the House who are drafting housing-finance reform legislation are tackling a number of issues that impact the non-agency market. At a hearing last week by the House Financial Services Subcommittee on Housing and Insurance, Chairman Sean Duffy, R-WI, said the panel’s recent hearings were aimed at getting feedback for a new legislative proposal. Duffy also stressed that the effort should be bipartisan. “I believe that if we’re going to be successful not just in ...

Freddie Mac significantly reduced its holdings of nonprime mortgage-backed securities in the third quarter, according to an analysis by Inside Nonconforming Markets. Freddie held $5.14 billion of nonprime MBS as of the end of September, down 52.2 percent from June. The government-sponsored enterprise sold approximately $5.00 billion of its non-agency MBS holdings during the quarter, according to filings with the Securities and Exchange Commission ... [Includes one data chart]