Citadel Servicing Corp. continues to ready its first nonprime mortgage-backed security and received risk assessments from Morningstar Credit Ratings last week. The rating service evaluated Citadel as a lender and servicer, assigning it level-three rankings on a scale of one to four, with four being the worst. The assessment, along with a similar assessment by Fitch Ratings earlier this year, show that Citadel is taking steps toward issuing rated nonprime MBS. Sources close to ...

Providers of third-party due diligence services for non-agency mortgages are considering standardizing portions of the review and reporting process, according to Fitch Ratings. The rating service hosted a roundtable with a number of due diligence firms this month and provided some details on the meeting last week. “Participants agreed that increased focus on consensus where appropriate benefits the market as it mitigates pressures that third-party review firms may be ...

As Congress works on legislation aimed at reforming the roles of the government-sponsored enterprises, provisions regarding practices in the non-agency mortgage-backed security market should be included in the legislation, according to the Securities Industry and Financial Markets Association. Kevin Chavers, a managing director at BlackRock, testified on behalf of SIFMA at a hearing this week by the House Financial Services Subcommittee on Housing and Insurance ...

Underwriting standards for the mortgages included in prime non-agency mortgage-backed securities in the third quarter were largely unchanged from the types of loans seen in the market the past year, according to a new analysis by Inside Nonconforming Markets. The average credit score on prime non-agency MBS issued in the third quarter was 770.3, down from 772.3 the previous quarter but up from 766.4 in the third quarter of 2016. Average debt-to-income ... [Includes one data chart]

Investors in jumbo mortgage-backed securities face relatively low exposure to potential losses related to fires in California, according to an analysis by Moody’s Investors Service. The rating service said 2.9 percent of the outstanding mortgages in post-crisis jumbo MBS rated by Moody’s are in counties affected by the recent fires. And while some borrowers may suffer losses because of insufficient insurance coverage, Moody’s said hazard insurance and servicers’ ... [Includes two briefs]

Citadel Servicing Corp. has talked about issuing its first non-prime MBS, possibly late this year, and this week cleared a hurdle when it received lender and servicer ratings from Morningstar. According to sources close to the company, the anticipated MBS – backed by newly originated loans that do not meet the qualified-mortgage test – could be as large as $250 million. Nomura is assisting Citadel with the deal, a source noted, adding that the bond may not actually hit the market until ...

JPMorgan Chase, like most mortgage industry participants, endorses the solution that the Consumer Financial Protection Bureau has planned to resolve what’s known as the “black hole” in the bureau’s integrated disclosure rule. However, some big changes still need to be made if private capital is going to fully return to the mortgage market; namely, more cures for errors and greater clarity when it comes to legal liability. “Chase strongly supports the CFPB’s proposal to eliminate ...

Issuance of prime non-agency mortgage-backed securities increased by more than 50.0 percent from the second quarter to the third, while activity in the nonprime MBS market slowed, according to a new ranking and analysis by Inside Nonconforming Markets. Some $2.97 billion of prime non-agency MBS was issued in the third quarter, up 58.1 percent from the previous period. The deals were largely backed by jumbo mortgages, along with some loans ... [Includes one data chart]

Redwood Trust loosened its underwriting guidelines for jumbo mortgages in an effort to acquire loans beyond the typical standards set by big banks, according to officials at the real estate investment trust. “It’s meant to [address] the entire universe outside of the banks while still serving borrowers who we think are good candidates and will repay,” Christopher Abate, president of Redwood, said during an investor presentation in September. Redwood introduced its Choice expanded-prime ...

Ocwen Financial revealed last week that it won’t face enforcement actions from the Securities and Exchange Commission regarding two outstanding investigations. And the nonbank has reached settlements with a number of the state regulators that took actions against the company earlier this year. The SEC was conducting investigations involving Ocwen regarding the use of collection agents and fees and expenses related to liquidated loans and real estate-owned ...