The proposed standards drafted by the Structured Finance Industry Group regarding mortgage disclosure rules will help address issues in the non-agency market, according to investors and rating services. Moody’s Investors Service hosted a meeting last week with a group of investors, issuers and others involved in non-agency MBS. Among other issues, the group discussed the Consumer Financial Protection Bureau’s combined Truth in Lending Act and the ...

Clayton Holdings was rated as a deal agent for non-agency mortgage-backed securities last week. The rating by Morningstar Credit Ratings was the first formal assessment of a deal agent, a role aimed at improving protections for investors in new non-agency MBS. Morningstar also assessed Clayton as a representation-and-warranty reviewer, assigning ratings of MOR RV2 for both functions. The firm’s rating scale ranges from RV1 to RV4 and Morningstar said it is the only ...

For the issuance of mortgage-backed securities with non-qualified mortgages to take off, industry analysts suggest that banks need to play a larger role. To this point, nonbanks have been the only issuers of non-QM MBS. Ron D’Vari and Timothy Bernstein, analysts at New Oak, authored an overview of non-QM MBS issued in the latest issue of The Journal of Structured Finance, which was published this month. The analysts said real estate investment trusts and hedge funds ...

A group of investors pushed back against suggestions that so-called private capital won’t return to the market for new non-agency mortgage-backed securities. The Association of Mortgage Investors took exception to recent comments by Timothy Mayopoulos, president and CEO of Fannie Mae. He predicted that the non-agency MBS market won’t come back due to significant losses suffered during the financial crisis. However, the AMI said the government-sponsored enterprises are ...

After declining for 10 consecutive quarters, the serious delinquency rate on subprime mortgages increased in the first quarter of 2016, according to the Mortgage Bankers Association. The non-seasonally-adjusted serious delinquency rate on subprime mortgages was 12.41 percent at the end of the first quarter of 2016, up from 12.39 percent the previous quarter and down from 15.17 percent in the first quarter of 2015. The serious delinquency rate ... [Includes six briefs]

FHA activity was lackluster in the first three months of 2016 as loan originations fell 7.8 percent from the prior quarter, according to Inside FHA/VA Lending’s analysis of agency data. The weak first-quarter production of $53.5 billion appeared to continue a trend from 2015, which saw the fourth quarter close with $58.1 billion, down significantly from $73.7 billion in the third quarter. In contrast, FHA originations fared better year-over year. Loan production was up 35.6 percent in the first quarter compared to the same period last year. Purchase lending totaled $36.5 billion in the first three months with overall production trending downward during the period. Borrowers in the 640-679 and 680-719 credit score ranges made up the bulk of new endorsements for January and February, the latest FHA data show. It is unlikely that trend will change even if March endorsements were added. Between all ... [ 2 charts ]

DBRS cautioned that the representations and warranties on the deal are relatively weak and include a sunset provision after 13 months.

All three major food groups in the contemporary mortgage market – government-insured, jumbo and conventional conforming – saw roughly the same drop in new originations from the fourth quarter of 2015 to the first three months of 2016, according to a new analysis by Inside Mortgage Finance. Production of loans with FHA, VA and rural housing guarantees held up a little better than the other sectors, with estimated originations slipping 1.0 percent from the fourth quarter. Although purchase mortgages account for a relatively higher share of originations in the government-insured market, there was a boost in refinance lending, especially in the VA program, that helped sustain overall production in the sector. The conventional-conforming and jumbo markets were...[Includes two data tables]

Falling delinquency and foreclosure rates over the last few years have continued to break recent records, according to industry sources, thanks to several factors including an improved housing market and price appreciation. As of the end of March, only 4.95 percent of the $5.08 trillion of home mortgages covered by the Inside Mortgage Finance Large Servicer Delinquency Index were in default or foreclosure status. That was down from 5.54 percent at the end of the fourth quarter. The figures are not seasonally adjusted. The Mortgage Bankers Association reported...[Includes one data table]

“If nothing is done in the near term, the natural progression could be a spillover of mortgage originations that favor the private-label market,” S&P said.