Invictus Capital Partners, an investment management firm, started aggregating nonprime mortgages in August 2015. The firm has purchased more than 400 mortgages and has plans for further growth. Invictus aggregates mortgages through an affiliate, Verus Mortgage Capital. Verus is set to issue its first nonprime mortgage-backed security – a $145.02 million deal that’s scheduled to close on Feb. 22. Verus has acquired $300.0 million of nonprime mortgages, according to ...

Only 69.1 percent of home mortgages originated in 2016 wound up in agency or non-agency MBS issued last year, according to a new Inside MBS & ABS analysis. It was the second-lowest annual mortgage-securitization rate on record, and the third year in a row that the rate failed to reach the 70.0 percent mark. The low securitization rate mostly results from the fact that relatively few jumbo mortgages get out of bank portfolios and into the non-agency MBS market. According to Inside Mortgage Finance estimates, some $381.0 billion of jumbo mortgages were originated...[Includes one data table]

Analysts at DBRS anticipate some notable changes in the residential mortgage securitization market this year, mostly as a result of expected higher interest rates. “Despite a healthy housing market recovery, post-crisis non-agency RMBS issuance has remained stagnant for several reasons,” said Quincy Tang, managing director of RMBS structured finance, in a new research report issued early this week. In addition to the dominance of Fannie Mae and Freddie Mac and bank balance-sheet capacity, “a persistently low interest rate environment has rendered...

Invictus Capital Partners, an investment management firm, is preparing to issue a nonprime mortgage-backed security backed by newly-originated home loans from four different lenders, according to documents filed with the Securities and Exchange Commission this week. Covius, a due diligence provider, said it reviewed mortgages with an unpaid principal balance of $118.96 million for the planned Verus Securitization Trust 2017-1. The bulk of the contributions for the MBS were ...

There will likely be a notable increase in the issuance of mortgage-backed securities backed by newly originated nonprime mortgages, according to Fitch Ratings. As many as eight firms are looking to join Lone Star Funds in issuing rated deals, though issuance isn’t expected to get anywhere near the levels seen in the run up to the financial crisis. Some $999.5 million in nonprime MBS was issued in 2016, according to the rating service. “Fitch estimates those figures could double in 2017, and ...

Redwood Trust is moving relatively quickly to issue its second jumbo mortgage-backed security of 2017. The firm is planning a $347.85 million transaction, according to a presale report from Kroll Bond Rating Agency. Sequoia Mortgage Trust 2017-2 is scheduled to close Feb. 17, about a month after Redwood closed a $342.93 million issuance. The burst of activity suggests that Redwood is seeing relatively strong pricing for jumbo MBS. Officials at Redwood couldn’t comment on ...

Two banks dominated contributions to prime non-agency mortgage-backed securities issued in the past two years, according to a new ranking and analysis by Inside Nonconforming Markets. And a majority of the top 10 contributors to prime jumbo MBS were banks or affiliated with banks. JPMorgan Chase accounted for $4.58 billion of the prime mortgages included in prime non-agency MBS in 2015 and 2016, a 22.1 percent share of total issuance ... [Includes one data chart]

Securitization of commercial mortgages was down slightly in 2016 as a result of a sharp drop in the non-agency commercial MBS market, according to a new Inside MBS & ABS analysis. Meanwhile, the agency multifamily MBS platforms cranked out record new issuance last year. In total, some $209.03 billion of commercial-property MBS were issued last year, a 3.1 percent drop from 2015. It still ranked as the second most-productive year in commercial MBS issuance since 2007, the year before the financial market meltdown. But non-agency CMBS issuance fell...[Includes one data table]

Among the many impediments to a revival of the non-agency MBS market is what potential investors see as a lack of transparency from issuers. To address the issue, the Institute for Financial Transparency has created a “transparency label” that will identify non-agency MBS that include adequate disclosures. Richard Field, director of the IFT, detailed the Transparency Label Initiative in a recent study published by the National Association of Insurance Commissioners and the Center for Insurance Policy and Research. “While there has been a significant amount of activity surrounding disclosure for structured finance securities, these securities still remain...

With the post-election interest-rate rise sticking around, there’s a growing school of thought that residential originators will finally ease underwriting standards in an effort to boost lending volume. But the way things stand today, that could be wishful thinking. The Mortgage Bankers Association told Inside Mortgage Finance this week that its Mortgage Credit Availability Index shows a “gradual” loosening has occurred, but it credits a greater availability of jumbo product for the reading. As MBA Senior Vice President of Research Michael Fratantoni put...