The trickle of jumbo mortgage-backed securities issuance seen since July will continue as WinWater Home Mortgage prepares to issue a $407.95 million deal. DBRS and Moody’s Investors Service issued presale reports on the planned MBS this week. WinWater Mortgage Loan Trust 2016-1 will be backed by qualified mortgages from 68 lenders, led by Caliber Home Loans with an 11.6 percent share, Ditech Financial (10.0 percent) and LoanDepot (8.0 percent). The deal consists of two pools ...

The volume of non-agency mortgage-backed securities held by banks and thrifts has declined much more quickly than the amount of total non-agency MBS outstanding. Banks and thrifts held a total of $96.76 billion in non-agency MBS as of the end of the third quarter of 2015, down 28.4 percent compared with the end of the third quarter of 2014, according to a new analysis and ranking from the Inside Mortgage Finance Bank Mortgage Database. In that span ... [Includes one data chart]

A&D Mortgage recently started offering non-qualified mortgages on a wholesale basis via mortgage brokers. The lender, whose originations are focused in southern Florida, noted that its underwriting for the loans includes “limited income and asset documentation” including options for stated income and stated assets. A&D offers non-QMs aimed at investors and foreign nationals. The lender said the loans are typically for non-owner-occupied ... [Includes four briefs]

With nonbanks fearing they could be stuck with error-laden mortgages that violate the integrated disclosure rule, a secondary market has developed for this new breed of “scratch and dent” loans, according to interviews conducted by Inside Mortgage Finance. One investor, requesting his firm’s name not be identified, said his shop bought such a mortgage for 90 cents on the dollar. Participants in the market – including investors and traders – concede...

About a month after risk-retention requirements took effect for newly issued non-agency MBS, industry participants continue to work on complying with the standards set by the Dodd-Frank Act. Non-agency MBS issued on Dec. 24, 2015, and beyond are subject to risk-retention standards. The standards will apply to other MBS and ABS asset types for deals issued on and after Dec. 24 of this year. The first jumbo MBS subject to risk-retention requirements is scheduled...

New issuance of non-agency MBS rose smartly in 2015, nearly matching the highest annual production volume since the financial market meltdown back in 2007. Some $61.60 billion of non-agency MBS came to market last year, a solid 13.9 percent increase from 2014, according to Inside MBS & ABS. This figure does not include Fannie Mae and Freddie Mac credit risk-transfer deals – which attract traditional non-agency MBS credit investors but are ... [Includes three data charts]

The Internal Revenue Service recently provided guidance to an MBS trustee and master servicer confirming that a settlement with investors was compliant with requirements for real estate mortgage investment conduits. While Private Letter Ruling 201601005 applies only to the unidentified parties that sought the guidance from the IRS, industry attorneys suggest that the letter could be useful when structuring settlements with MBS investors. The letter was released ...

Legacy non-agency MBS issued before the financial market collapse in 2008 continue to spawn millions in lawsuits. In the Southern District of New York, Commerzbank AG, as an RMBS investor, recently sued Deutsche Bank, HSBC, Wells Fargo and the Bank of New York Mellon in their capacities as MBS trustees on deals that inflicted approximately $1.88 billion in losses on the German bank. Commerzbank claimed it suffered $750 million in losses related to BNYM’s alleged failures ...

The non-agency mortgage-backed security market could be revived this year by economic factors rather than efforts by Congress or industry participants, according to analysts. The non-agency share of mortgage originations has been relatively strong in recent years, but the loans were largely held in bank portfolios instead of included in non-agency MBS. Legislative reform of the government-sponsored enterprises and potential incentives for non-agency MBS issuance look ...

Issuers of jumbo mortgage-backed securities stuck with plain vanilla mortgages in 2015, according to a new analysis by Inside Nonconforming Markets. Meanwhile, a wide variety of lenders contributed to jumbo MBS last year, with only one bank accounting for an outsized share of contributions. First Republic Bank was the top originator of jumbo mortgages that were securitized in 2015, accounting for nearly 20 percent of all jumbo MBS issuance ... [Includes two data charts]