A new jumbo MBS from Redwood Trust will mark the second non-agency MBS to include mortgages subject to the TRID mortgage disclosure rule. The real estate investment trust plans to issue a $344.89 million deal next week, according to a presale report from Kroll Bond Rating Agency. The rating service said 366 mortgages, accounting for 74.8 percent of the loan pool, are subject to the combined Truth in Lending Act/Real Estate Settlement Procedures Act rule. Redwood will issue...

The nonagency, nonprime MBS market continues to generate plenty of interest among mortgage professionals, but the number of securities being generated – and contemplated – remains small. The situation isn’t likely to change anytime soon, but there are developments on the horizon that could spur an increase in issuance. According to interviews conducted by Inside MBS & ABS, the number of investors interested in buying nonprime whole loans is increasing. So far, the primary attraction is the higher yield offered by these non-Fannie Mae/Freddie Mac and FHA loans. Last year, roughly $2 billion in nonprime loans were originated...

Redwood Trust is preparing to issue a $344.89 million jumbo mortgage-backed security next week, according to a presale report from Kroll Bond Rating Agency. Most of the mortgages in the planned deal are subject to the TRID mortgage disclosure rule. The combined Truth in Lending Act/Real Estate Settlement Procedures Act rule from the Consumer Financial Protection Bureau took effect in early October. Since then, only one jumbo MBS has included TRID loans ...

Bank and thrift holdings of first-lien mortgages as of the end of the first quarter of 2016 declined compared with the end of 2015, according to an Inside Nonconforming Markets analysis of bank and thrift call reports. Banks and thrifts held $1.85 trillion in first-lien residential mortgages at the end of March, down 1.0 percent from the end of December. But industry holdings were up 1.6 percent from March 2015, suggesting that banks still have plenty of ... [Includes one data chart]

Hopes for a resurgence of issuance of non-agency mortgage-backed securities backed by new mortgages appear to be tied more to banks than to steps Congress might take to reduce the government-sponsored enterprises’ footprint, according to industry analysts. Since the financial crisis, banks have largely opted to hold non-agency originations in portfolio instead of issuing MBS. According to an analysis by Bank of America Merrill Lynch, capital requirements have given banks ...

Officials at Bayview Loan Servicing note that the loans available to correspondents and brokers in the lender’s portfolio lending program allow borrowers shut out from agency mortgages to qualify. “All of the agency and qualified mortgage products that are out there look the same,” Ski Swiatkowski, vice president of portfolio product marketing at Bayview, said last week during a webinar hosted by the lender. Bayview, whose owners include affiliates of The Blackstone Group, offers five ...

The public mortgage-backed security shelf recently filed by Redwood Trust was drafted with significant input from the Securities and Exchange Commission, according to a review of correspondence between the jumbo MBS issuer and the SEC. After Redwood’s new Form SF-3, which allows for $4.83 billion in MBS issuance, was published in mid-May, the SEC released four letters sent to Redwood during the drafting stage for the shelf. Redwood’s responses to the SEC’s inquiries were also ...

Determining a self-employed borrower’s ability to repay can be one of the more challenging underwriting tasks for non-agency lenders. Shelley Callaghan, a senior marketing program manager at MGIC, said one of the main issues to consider when underwriting borrowers with income from partnerships or S corporations is the pattern of cash distributions from the business to the potential borrower. A number of nonbanks have launched non-agency programs for self-employed ...

The upcoming batch of non-agency interest-only mortgages that will hit a 10-year recast is larger than the IO recast volume seen last year, according to Moody’s Investors Service. However, the rating service predicts that a spike in default rates prompted by the recasts will be less severe than that of 2015. “Default rates will likely stay below those of Alt A IO loans in non-agency mortgage-backed securities which re-cast to full payment in 2015 because of a slightly smaller expected ...

Comparing 2005 with 2015, the share of loan applications from borrowers with low credit scores has declined at a greater pace than originations of mortgages to borrowers with lower credit scores, according to CoreLogic. “The decline in originations could be a result of potential applicants being either too cautious or discouraged from applying, more so than tight underwriting as the culprit in lower mortgage activity,” said Archana Pradhan, an economist at ... [Includes seven briefs]