The supply of outstanding residential MBS in the market continued to grow at a measured pace during the second quarter of 2017, thanks to the robust single-family MBS machines at Fannie Mae, Freddie Mac and Ginnie Mae. A total of $6.675 trillion of single-family MBS was outstanding as of the end of June, according to a new Inside MBS & ABS analysis. That was up 0.8 percent from the end of March, and it represented a record 64.0 percent of outstanding single-family mortgage debt. The Federal Reserve this week reported that home loan debt outstanding rose 0.7 percent to $10.430 trillion during the second quarter. All the MBS growth was...[Includes three data tables]

Issuance of non-agency MBS backed by newly originated home loans remains well below levels seen before the financial crisis. While new regulations have stopped some pre-crisis loan types from being originated, industry participants suggest that other major factors are also limiting the supply of loans available for MBS. Chris Helwig, a managing director at Amherst Pierpont, noted that banks are competing for prime jumbos and holding them in portfolio, and many borrowers who previously might have received subprime mortgages opt for FHA loans. “All that is left for non-agency MBS is...

Redwood Trust is set to issue its first jumbo mortgage-backed security backed predominantly by loans with looser underwriting standards than the super-prime jumbos that have dominated the market. The planned $316.49 million Sequoia Mortgage Trust 2017-CH-1 includes many non-qualified mortgages and other loans that fall outside of Redwood’s traditional Select program. Kroll Bond Rating Agency and Moody’s Investors Service assigned preliminary AAA ratings to the MBS last week ...

Caliber Home Loans is on track to nearly double its originations of non-qualified mortgages this year and will supply the collateral for a forthcoming mortgage-backed security, the largest in the post-crisis era.Caliber plans to originate $1.00 billion of non-QMs this year, up from $539.0 million in 2016, according to DBRS. The nonbank lender has boosted its non-QM production across lending channels, led by wholesale. Caliber had $247.0 million in wholesale non-QM originations ...

An affiliate of Shellpoint Partners is preparing to issue another jumbo mortgage-backed security backed largely by mortgages aggregated by Bank of America. The planned Shellpoint Co-Originator Trust 2017-2 is a $323.38 million deal that received preliminary AAA ratings this week. Nearly all of the mortgages were aggregated by BofA through its jumbo whole-loan purchase program and sold to Shellpoint in bulk deals. Loans from 17 lenders will be included in the pool, led by ...

Three non-agency mortgage-backed securities issuers were preparing to issue deals around the time that Hurricane Harvey hit the Gulf Coast and Hurricane Irma made landfall in Florida. Deals from the issuers include mortgages on properties in the disaster areas, prompting inspections and an emphasis on the representations and warranties included with the MBS. An affiliate of Shellpoint Partners is set to issue a $323.38 million deal on Sept. 29. According to Kroll Bond Rating Agency ...

An affiliate of Blackstone is preparing to issue a rare non-agency mortgage-backed security backed by jumbo reverse mortgages, according to filings with the Securities and Exchange Commission. A handful of non-agency MBS backed by jumbo reverse mortgages were issued before the financial crisis and none appear to have been issued in recent years. Blackstone’s Podium Mortgage Capital hired Clayton to perform due diligence on 280 jumbo reverse mortgages. The loans were ...

The Milken Institute – a nonpartisan think tank – established a new policy team last week to work on issues involving housing finance reform. Eric Kaplan was named director of Milken’s Housing Finance Program. He was a managing partner at Ranieri Strategies and continues to chair the Structured Finance Industry Group’s RMBS 3.0 effort. Michael Milken and Lewis Ranieri will co-chair a new Housing Advisory Council, which will inform the work of the team led by Kaplan ... [Includes two briefs]

Moody’s Investors Service is working to correct errors it made when rating a significant number of interest-only tranches on non-agency MBS dating back to at least 2015. At the end of August, Moody’s placed ratings of IO tranches from 953 MBS on review. While such reviews generally indicate whether an upgrade or downgrade is possible, the rating service said it wasn’t sure which direction ratings would go for many deals included in the review. The effort covers...

Private-label issuance all but disappeared since the recession and is finally expected to make a comeback, but lenders and aggregators will have a host of new requirements to meet. One firm is planning to help the industry navigate today’s landscape by offering a solution aimed at non-agency MBS readiness for new and old issuers. Clayton Holdings announced last week that it designed a program to help lenders and aggregators with their due diligence by understanding and preparing to comply with the new rules surrounding securitizing these non-agency assets. The firm hopes...