Industry analysts expect that issuance of non-agency MBS in 2017 will outpace the volume seen last year. But 10 years after the start of the financial crisis, the non-agency MBS market is nowhere close to its level before the crisis, and a full recovery doesn’t look imminent. Some $28.8 billion of non-agency MBS was issued in the first half of 2017, up 32.0 percent from the same period last year, according to the Inside Mortgage Finance MBS Database. Non-agency MBS issuance peaked in 2006 at $1.19 trillion. Some 71.8 percent of the issuance that year was backed by subprime mortgages and Alt A loans. Post-crisis non-agency MBS issuance has been dominated...

The first post-crisis prime non-agency mortgage-backed security from Flagstar Bank looks a lot like other deals issued in recent years, including exceptionally strong underwriting standards. However, the bank did break from the pack slightly with a few features in the new issuance. The $443.79 million Flagstar Mortgage Trust 2017-1 received AAA ratings with credit enhancement of 6.25 percent on the senior tranche. The deal was predominantly backed by non-agency jumbos, but ...

Redwood Trust is acquiring enough “expanded-prime” mortgages to put together a non-agency securitization, according to officials at the real estate investment trust. Redwood announced this week that it plans to issue a mortgage-backed security collateralized by loans from its “Choice” program as soon as September. The Choice program allows for somewhat looser underwriting standards than what’s typically seen in the jumbo MBS market, such as slightly higher debt-to-income ratios or ...

Participants in the post-crisis nonprime mortgage-backed securities market have resisted efforts to brand their deals as “subprime” and for good reason: the loans backing these transactions more closely resemble pre-crisis Alt A mortgages. In fact, some of the underwriting characteristics on new nonprime loans are even stronger than the credit quality on pre-crisis Alt A mortgages, according to an analysis by Inside Nonconforming Markets. Between ... [Includes one data chart]

Impac Mortgage Holdings has continued to increase its production of non-qualified mortgages and plans to issue a $400.0 million mortgage-backed security collateralized by such loans, according to officials at the nonbank. Impac originated $289.60 million of non-QMs in 2016. In the first half of 2017, the nonbank had $416.70 million in non-QM volume. “We’ve seen a decrease in the conforming market and now month-over-month, we’re seeing an increase in the non-QM market ...

Investors in non-agency mortgage-backed securities continue to grapple with a decision by a trustee to withhold millions of dollars from investors in vintage deals. Industry analysts suggest that post-crisis non-agency MBS include protections against such withholding. At the end of June, Wells Fargo withheld $94.3 million in funds from investors in 20 non-agency MBS that were subject to clean-up calls by New Residential Investment. The deals in question are the subject of a lawsuit ...

JPMorgan Chase is preparing to issue another large prime non-agency mortgage-backed security, according to documents filed this week with the Securities and Exchange Commission. It will be the third prime non-agency MBS from the bank this year. Moody’s Investors Service this week affirmed its assessment of First Republic Bank as a “strong” originator of jumbo mortgages. “First Republic distinguishes itself from other originators in its consistency ... [Includes two briefs]

Ginnie Mae this week announced the full automation of Platinum securities processing and issuance – a key step in modernizing the agency’s outdated technology and infrastructure. Automation went into effect in mid-July and nearly $1 billion of the Platinum pools have been processed through the MyGinnieMae portal, the agency said in a statement. MyGinnieMae is a self-servicing portal that connects users and enables collaboration and the sharing of organizational knowledge, the agency explained. The year-to-date volume for Platinum mortgage-backed securities is $6.1 billion. Ginnie’s Multiclass Securities Program allows participating issuers to pool some of their MBS into a single Platinum trust, which issues securities based on the pool. A Platinum security is designed to improve liquidity of Ginnie MBS through trades or use in structured finance and repurchase transactions. Previously, Platinum products were ...

For years, big banks have delivered nearly all of their conforming mortgage production to the government-sponsored enterprises and retained their jumbo mortgages in portfolio. But some big banks have changed tactics, exploring differing execution options for their originations. Paul Donofrio, CFO of Bank of America, said the bank retained about 90.0 percent of its mortgage production on balance sheet in the second quarter of 2017. BofA had $18.0 billion in originations during the quarter, including first mortgages and home-equity loans. The loans retained...

New issuance of MBS backed by income-property mortgages during the second quarter rebounded from a lull in early 2017, according to a new analysis by Inside MBS & ABS. A total of $51.03 billion of commercial mortgages were securitized in the second quarter, a gain of 12.1 percent from the first three months of 2017. That brought year-to-date commercial MBS issuance to $96.54 billion, 12.4 percent ahead of the pace set in 2016. But CMBS production was...[Includes one data table]