The jumbo mortgage-backed security market is set for a significant boost as Flagstar Bank will issue MBS. Since 2015, only one bank has issued jumbo MBS: JPMorgan Chase. Other issuers have all been nonbanks as banks have largely opted to retain jumbos in portfolio instead of issue non-agency MBS.Some details about the planned Flagstar Mortgage Trust 2017-1 were revealed this week in documents filed with the Securities and Exchange Commission ...

Policymakers should make a number of changes to regulations to entice investors to buy new non-agency mortgage-backed securities, according to officials at Pacific Investment Management Company. PIMCO was a major investor in pre-crisis non-agency MBS. “Unlike the complexities of government-sponsored enterprise reform, a few minor, straightforward changes – some of which can be done through regulation, not legislation – can be made to bring private capital back to the market ...

Only fixed-rate mortgages were included in prime non-agency mortgage-backed securities issued in the second quarter of 2017, according to an analysis by Inside Nonconforming Markets. It was the third quarterly interval since the first quarter of 2016 that adjustable-rate mortgages and loans with interest-only features were excluded from prime/jumbo MBS. And in the first quarter of 2017, ARMs accounted for less than 1.0 percent of total prime non-agency ... [Includes two data charts]

Loans from more than 100 lenders are in the latest jumbo mortgage-backed security from Redwood Trust but most of the lenders contributed such a small volume of loans to the issuance that they weren’t identified by rating services. Only two lenders have consistently provided more than 5.0 percent of the dollar volume in jumbo MBS Redwood has issued this year: First Republic Bank and Quicken Loans. Loans from First Republic account for 19.6 percent of the $485.25 million ...

A new nonprime mortgage-backed security from Invictus Capital Partners varies in some ways from the deal the firm issued in February. Invictus is set to issue the $241.00 million Verus Securitization Trust 2017-2. The deal the firm issued in the first quarter – the first MBS from Invictus – was for $145.02 million. The purchase-mortgage share in the new deal is down sharply compared with the previous MBS from Invictus, at 46.0 percent compared with 68.3 percent. The cash-out refinance ...

The Consumer Financial Protection Bureau needs to do more to address problems with the TILA-RESPA Integrated Disclosure rule, according to participants in the non-agency market. The final rule issued this month by the CFPB was seen as helpful but insufficient. The final rule from the CFPB clarified some issues and formalized some guidance. The Structured Finance Industry Group said uncertainty regarding TRID violations persists. “SFIG applauds the efforts of the CFPB to ...

The $210.45 million mortgage-backed security Angel Oak Capital Advisors issued earlier this month had the tightest execution of any MBS backed by non-qualified mortgages, according to Sreeni Prabhu, Angel Oak’s co-CEO and CIO. “We believe investors like Angel Oak’s vertically integrated issuer model,” Prabhu said. “This is unique in the marketplace and offers them a ‘pure play’ exposure to Angel Oak’s origination and underwriting capabilities.” ... [Includes six briefs]

Bipartisan Flood Bill Introduced in Senate. The Senate Committee on Banking, Housing and Urban Affairs will soon consider a bipartisan bill introduced this week that would keep the National Flood Insurance Program funded for six more years and create new risk mitigation procedures for communities to follow.Senate Banking Committee Chairman Mike Crapo, R-ID, and ranking Democrat Sherrod Brown, OH, said the bill would serve as a template for consideration by the whole committee. The Senate bill does not include core provisions in the House version, including the development of a private flood insurance market to complement the NFIP. In addition, the bill does not call for cuts in the reimbursement rate for Write-Your-Own flood-insurance carriers that service NFIP policies. However, amendments are likely, according to Crapo and Brown. Meanwhile, the ...

The non-agency MBS market is off to what looks like one of its best years in terms of new issuance since the financial crisis, according to a new analysis by Inside MBS & ABS. A total of $15.30 billion of non-agency MBS were issued in the second quarter, representing a gain of 13.4 percent from the first three months of 2017. That brought year-to-date production to $28.80 billion, a 32.0 percent increase over the first half of 2016. As has been the case since 2009, most of the new production has been...[Includes three data tables]

Wells Fargo’s recent maneuver to hold back funds on vintage non-agency MBS subject to clean-up calls could have broader implications for the market, according to industry analysts. Other trustees appear likely to follow the lead set by Wells, which could limit clean-up calls by servicers. In June, Wells 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 involving MBS investors alleging that Wells failed to perform its duties as trustee. Wells disputed the charges and withheld the funds to cover potential litigation costs. Analysts at Bank of America Merrill Lynch said...