New loan limits for the government-sponsored enterprises in 2017 won’t have much of an impact on jumbo originations, according to an analysis by Inside Nonconforming Markets. The Federal Housing Finance Agency announced last week that the baseline conforming loan limit for Fannie Mae and Freddie Mac will increase in 2017, which will also boost the GSEs’ high-cost loan limit. The baseline conforming loan limit will increase to $424,100 in 2017, up from the $417,000 level it has ...

Reform of the government-sponsored enterprises and a potential for more non-agency lending will be a priority for the Trump administration, according to the presumptive nominee to head the Treasury Department. President-elect Donald Trump is likely to nominate Steve Mnuchin to lead the Treasury. Mnuchin is a former partner at Goldman Sachs, founded the hedge fund Dune Capital Management and was among the investors that purchased IndyMac in 2009. In an interview this week on ...

Most of the top 30 servicers of jumbo mortgages increased their servicing portfolios during the third quarter, according to a new Inside Nonconforming Markets ranking. The volume of jumbo mortgages outstanding rose to an estimated $892.4 billion as of the end of September, up 1.7 percent from June and up 10.2 percent from a year ago. Wells Fargo remained the top jumbo servicer, with a $275.1 billion portfolio. That was up 1.1 percent compared to the second quarter ... [Includes one data chart]

Moody’s Investors Service published a warning this week regarding mortgage programs that use bank statements and letters from accountants to verify borrowers’ income. The rating service said that type of underwriting – especially when relying on fewer than 24 months of statements – yields loans that are more risky than mortgages that have traditional income verification. Bank-statement mortgages have gained some prominence in the non-agency market this year as Lone Star Funds ...

American International Group is preparing to resume issuing non-agency mortgage-backed securities, according to officials at the insurance company. The planned issuance differs significantly from the subprime MBS AIG issued before the financial crisis. Douglas Dachille, an executive vice president and CIO, said the firm is working to “rebalance its exposure to residential mortgages” after AIG’s sale of United Guaranty, a private mortgage insurer. During a recent presentation to investors ...

Performance of subprime mortgages continues to improve as the amount of loans outstanding declines. Some $265.0 billion in subprime mortgages were outstanding as of the end of the third quarter, according to estimates by Inside Nonconforming Markets. Only a small volume of new subprime mortgages have been originated since 2008, and in the past couple of years, large transfers of subprime servicing have been limited, prompting subprime servicing to ... [Includes one data chart]

Caliber Home Loans has significantly increased its servicing portfolio – including subprime mortgages – in recent years. While rapid growth by nonbank servicers has raised some concerns among industry analysts, S&P Global Ratings said Caliber has effectively managed its growth to this point. Caliber is one of the few servicers that has increased subprime servicing volume in recent years, and officials at the company have plans for further growth. To this point, Caliber’s servicing growth has ...

Lone Star Funds is set to issue a mortgage-backed security backed by new nonprime mortgages, according to documents filed with the Securities and Exchange Commission this week. It will be the third MBS from the COLT shelf this year. AMC Diligence said it reviewed 486 mortgages with a total unpaid principal balance of $235.40 million for the planned MBS. The mortgages were originated by Caliber Home Loans, LendSure Mortgage and Sterling Bank & Trust ... [Includes two briefs]

Total FHA and VA originations increased during the first nine months of 2016 compared to the same period last year, although VA was more active, posting a double-digit production increase, according to an analysis of Ginnie Mae data. Lenders delivered $201.0 billion of FHA loans to Ginnie single-family mortgage pools over the last three quarters, up 4.8 percent from the previous year. Approximately 65.4 percent and 29.3 percent of FHA loans securitized were purchase loans and refinances, respectively. The remainder was loan modifications. VA originations totaled $143.2 billion over the same period, up 22.3 percent from last year. Refinances accounted for 51.9 percent of volume and purchase loans comprised 47.0 percent. The share of FHA loans in agency mortgage-backed securities for the nine-month period was 19.5 percent and 13.9 percent for VA. FHA loans accounted for ...

The FHA this week announced higher “floor” and “ceiling” loan limits for forward and reverse mortgages for 2017, pushing loan limits upward in certain metropolitan statistical areas by as much as $162,500. The loan-limit changes will take effect on Jan. 1, spurred by rising median home prices. The Case-Shiller Home Price Index for September reported that home prices increased 5.5 percent year-over-year, driven by a tight supply of homes for sale, especially in the West. Each year, FHA recalculates its loan limits based on 115 percent of the median house price in the area. For counties located in MSAs, the loan limit is calculated based on the highest-cost county within the MSA. Under the 2017 changes, FHA will raise its nationwide “floor,” or low-cost area mortgage limits, for one-unit properties to $275,665 from $271,050, a difference of $4,615. In high-cost areas, the loan-limit ceiling for a ... [ 2 charts ]