JPMorgan Chase this week issued the largest jumbo mortgage-backed security seen since the market started to return in 2010. The $940.06 million deal was backed by adjustable-rate mortgages originated by First Republic Bank. Previously, the largest post-crash deal was a $666.13 million jumbo MBS from Redwood Trust in February 2013. Prior to the financial crisis, many non-agency MBS had balances that topped $1.0 billion, while most jumbo MBS ...

First Republic Bank was the top contributor to jumbo MBS issued in 2014, according to a new ranking and analysis by Inside Nonconforming Markets. Officials at First Republic note that the bank tends to sell its originations of fixed-rate mortgages while adjustable-rate mortgages make for better portfolio holdings. However, the secondary market bid was strong enough for First Republic to sell some jumbo ARMs during the year, including a ... [Includes one data chart]

Regulators, rating services and investors are all targeting Ocwen Financial’s servicing of mortgages in non-agency mortgage-backed securities. Company officials responded by acknowledging some of the issues while strongly pushing back on others. Fitch Ratings and Moody’s Investors Service both recently downgraded Ocwen’s servicer ratings. When a servicer’s ratings fall below a certain level, non-agency MBS investors sometimes have the option to ...

After loosening every month for more than a year, underwriting on jumbo mortgages started to tighten in mid-2014, according to new data from the Mortgage Bankers Association and AllRegs. In the past three months, jumbo underwriting has started to loosen again and standards are the loosest they have been since early 2011.Angel Oak Mortgage Solutions announced that it launched a mini-correspondent offering for non-agency nonprime ... [Includes three briefs]

Issuers of non-agency MBS will likely continue to favor private placements over registering deals with the Securities and Exchange Commission, according to industry participants. While publicly registered deals in the ABS market and commercial MBS market are common, no non-agency MBS issued in 2014 was registered with the SEC. Instead, non-agency MBS issuers offered deals as 144A private placements. An official involved in the non-agency MBS market said...

Ocwen Financial may have to settle with investors in non-agency MBS it services to avoid having the underlying servicing rights being yanked away by a trustee, according to investors and analysts tracking the situation. Early this week, Ocwen attorney Richard Jacobsen sent a letter to the law firm of Gibbs & Bruns, sternly telling the attorneys for some of the RMBS holders that there is no basis for default under the trust agreements. Gibbs & Bruns is working...

Securitization of income-property mortgages continued to post strong new issuance numbers in 2014, with the non-agency commercial MBS sector doing particularly well, according to a new market analysis by Inside MBS & ABS. A total of $164.77 billion of securities backed by commercial mortgages were issued last year, down just 0.6 percent from 2013’s level, which was the high-water mark since just before the financial collapse. And non-agency CMBS production was up 11.6 percent in 2014, at $96.48 billion. Agency MBS issuance fell...[Includes one data chart]

The European Central Bank’s launch of a Fed-like quantitative easing program will likely keep the yield spread flat and interest rates low. The ECB plans monthly purchases of €60 billion in ABS and covered bonds issued by central governments, agencies and banks in the euro zone. U.S. experts have been mulling...

Standard & Poor’s agreed this week to a settlement with the Securities and Exchange Commission and two state attorneys general regarding ratings on commercial MBS and non-agency MBS. Regulators suggest that further actions involving the ratings services are in the works, likely including a much larger settlement with S&P regarding activity before the financial crisis. S&P’s settlement this week involved post-2010 activity. The rating service agreed to pay the SEC and attorneys general for New York and Massachusetts more than $77 million. S&P will also take a one-year “timeout” from rating conduit/fusion commercial MBS. “They lied...

FirstKey Mortgage, which has big plans in the non-agency space that include lending outside the qualified mortgage box and securitization, late this week saw the departure of three of its top executives, including CEO Bruce Witherell. According to industry officials familiar with the situation, FirstKey’s parent company, Cerberus, was beginning to take more of an active role in how the lender/issuer was being operated, a situation that didn’t sit well with some senior executives at the nonbank, including Witherell. Witherell and FirstKey executives Randy Sidhu and David Essex have accepted...