A pending change to accounting standards could change the way banks price jumbo mortgages, according to industry analysts. Beginning in 2020, many banks will have to change their accounting methods to include a “current expected credit loss model.” The adoption timeline was recently set by federal banking regulators. The CECL model forces banks to make projections for lifetime losses on loans they hold and potentially increase reserves relating to the projected losses ...
The Trump administration is likely to play a more active role in reducing the footprint of the government-sponsored enterprises in 2019, according to administration officials and industry analysts. Mel Watt’s term as director of the Federal Housing Finance Agency is set to end in January, allowing Trump to appoint a new director. The new director will likely take actions that are aligned with the Treasury Department’s goals for Fannie Mae and Freddie Mac, according to industry analysts ...
The latest prime non-agency mortgage-backed security from Flagstar Bank will differ somewhat from two similar deals issued by the bank this year, according to presale reports released this week. The share of mortgages subject to due diligence was adjusted and there will be a higher share of mortgages in the deal that are eligible for sale to the government-sponsored enterprises. The pending $466.93 million Flagstar Mortgage Trust 2018-4 follows deals from the bank that closed in ...
Prepayment rates on non-qualified mortgages are higher than the rates seen on legacy non-agency mortgages and performance for new production is better, according to industry analysts. “Nonprime non-QM loans have exhibited high voluntary prepayment speeds, resulting from credit curing and high initial mortgage interest rates,” analysts at Deutsche Bank Securities said. The voluntary prepayment rate on non-QM mortgage-backed securities ... [Includes one data chart]
Demand for jumbo mortgages was expected to decline due to various provisions included in tax reform legislation but applications for jumbos didn’t dip in early 2018, according to CoreLogic. The analytics firm tracked loan applications in high-cost areas, concentrated in California and the northeast. Applications for purchase mortgages in the first quarter of 2018 were compared with trends seen in the prior four years. “We didn’t observe any meaningful change in purchase loan application ...
TIAA and Angel Oak Companies look likely to price separate new MBS before the end of the second quarter, according to documents filed with the Securities and Exchange Commission. JPMorgan Chase is also preparing an MBS that could differ from its typical issuance. Merrill Lynch agreed to a settlement with the Securities and Exchange Commission this week regarding non-agency mortgage-backed security trading from 2009 through 2012 ... [Includes two briefs]
Reverse mortgage lenders started out strong in the first three month of 2018 with a 19.2 percent increase in Home Equity Conversion Mortgage production from the previous period. HECM endorsements totaled $5.4 billion in the first quarter, with purchase reverse loans accounting for the bulk of originations, 81.9 percent. First quarter production was up 18.5 percent from the same period last year. Meanwhile, HECM mortgage-backed securities issuance totaled $2.97 billion for the quarter, down from $3.25 billion in the prior quarter, Ginnie Mae data showed. The top five HECM originators in sequential order – American Advisors Group, Reverse Mortgage Funding, One Reverse Mortgage, Liberty Home Equity Solutions, and Synergy One Lending – accounted for $1.66 billion, or 30.8 percent, of total production during the first quarter. American Advisors maintained its top ranking with $841.4 million of HECM loans, which ... [Charts]
Mortgage production indicators were down almost across the board during the first quarter of 2018, but the jumbo market posted some of the biggest declines of all. [Includes three data charts.]
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