Issuance of prime non-agency mortgage-backed securities increased by more than 50.0 percent from the second quarter to the third, while activity in the nonprime MBS market slowed, according to a new ranking and analysis by Inside Nonconforming Markets. Some $2.97 billion of prime non-agency MBS was issued in the third quarter, up 58.1 percent from the previous period. The deals were largely backed by jumbo mortgages, along with some loans ... [Includes one data chart]

Redwood Trust loosened its underwriting guidelines for jumbo mortgages in an effort to acquire loans beyond the typical standards set by big banks, according to officials at the real estate investment trust. “It’s meant to [address] the entire universe outside of the banks while still serving borrowers who we think are good candidates and will repay,” Christopher Abate, president of Redwood, said during an investor presentation in September. Redwood introduced its Choice expanded-prime ...

A proposal released last week by the Treasury Department could make issuing and investing in non-agency mortgage-backed securities more attractive for banks. The Treasury called for revisions to various regulations that apply to non-agency MBS in a broad report suggesting regulatory reforms for capital markets. “In its review of the securitization market, the Treasury found that regulatory bank capital requirements treat investment in non-agency securitized ...

Originations of jumbo mortgages increased by 16.3 percent in 2016 but the sector’s share of total originations declined somewhat from the previous year, according to a ranking and analysis by Inside Mortgage Finance of newly released Home Mortgage Disclosure Act data. Some $340.88 billion of jumbos were originated in 2016, with banks dominating the ranks of the top lenders. Jumbos accounted for 17.5 percent of total originations last year, down from ... [Includes one data chart]

For originations of jumbo mortgages, it’s California and then everywhere else. The state accounted for 36.7 percent of jumbo lending in 2016, according to an analysis of Home Mortgage Disclosure Act data by Inside Mortgage Finance. Some $124.95 billion in jumbos were originated in the Golden State last year, up 18.2 percent from 2015. New York ranked second with $22.72 billion, accounting for 6.7 percent of total jumbo originations during the year. Jumbos ... [Includes one data chart]

A number of Republicans raised concerns last week about the exemption from qualified mortgage standards currently provided to mortgages eligible for sale to the government-sponsored enterprises. Loans must meet a number of standards to receive QM protections, including having a debt-to-income ratio below 43 percent. However, under the ability-to-repay rule from the Consumer Financial Protection Bureau that took effect in 2014, mortgages eligible for sale to Fannie Mae and Freddie Mac can receive QM status even if they have DTI ratios above 43 percent. The exemption is known as the “GSE patch.”

Ocwen Financial revealed last week that it won’t face enforcement actions from the Securities and Exchange Commission regarding two outstanding investigations. And the nonbank has reached settlements with a number of the state regulators that took actions against the company earlier this year. The SEC was conducting investigations involving Ocwen regarding the use of collection agents and fees and expenses related to liquidated loans and real estate-owned ...

After the standards for qualified mortgages took effect in 2014, few state-regulated banks stopped offering non-QMs, according to a survey by the Conference of State Bank Supervisors. “Non-QM mortgage lending activity appears relatively stable despite the regulatory tumult,” the state regulators said. According to a CSBS survey of more than 600 banks, the share of respondents that don’t offer non-QMs changed from 23.8 percent in 2014 to 26.5 percent ... [Includes one brief]

Department of Housing and Urban Development Secretary Ben Carson indicated he is open to the idea of moving the Home Equity Conversion Mortgage program out of the FHA Mutual Mortgage Insurance Fund to stem future losses. Testifying before the House Financial Services Committee this week, Carson said the changes the department has made recently, as well as those currently under consideration, will eliminate most of the program’s problems although residual issues may still linger. Carson acknowledged that the HECM program’s default rate has been a drain on the MMI Fund even though it is much smaller than the FHA’s forward loan portfolio. The recently revised HECM rules issued on Sept. 19 have “stopped the bleeding” in terms of new reverse mortgages, he added. However, separating the HECM portfolio from the FHA insurance fund and making it a stand-alone program is ...

An estimated 9.8 percent of Ginnie Mae’s business may be potentially at risk due to hurricanes Harvey, Irma and Maria, according to data released recently by the agency. The data represent the number of Ginnie loans and their unpaid principal balance amounts in presidentially declared disaster areas in Texas, Florida, Georgia, Puerto Rico and the U.S. Virgin Islands. A total of 1.07 million mortgage loans with an unpaid principal balance of $184.5 billion have been affected. Ginnie Mae’s current mortgage-backed securities portfolio totals $1.9 trillion. The data only refer to the geographic locations of all affected properties underlying loans in Ginnie MBS pools and do not indicate the percentage of those that may have sustained damage during a storm. Hurricane Irma had the highest share of affected loans, 6 percent, while Harvey and Maria accounted for 3 percent and 1 percent, respectively. Irma caused the ...