Angel Oak Capital Advisors is working on what should turn out to be its second nonprime mortgage securitization of the past six months, a deal that should be similar in size to its first offering of roughly $150 million, Inside MBS & ABS has learned. A source close to the company, who spoke under the condition his name not be used, could not commit to an exact issuance date except to say the security could be issued “soon.” To date, investor interest in the small amount of nonprime/non-qualified mortgage deals that have come to market has been...

Fannie Mae and Freddie Mac trimmed their retained mortgage investment portfolios in the first quarter of 2016 by a combined 2.8 percent. The Federal Housing Finance Agency directed the government-sponsored enterprises to wind down their portfolios by 15 percent each year until they reach $250 billion by 2018. At the end of the first quarter, Fannie’s mortgage-related investment portfolio dropped to $332.6 billion, a 3.6 percent decline from December 2015. The biggest drop was in the GSE’s non-agency MBS holdings, which fell 21.3 percent in the first quarter to just $13.3 billion, roughly one tenth the amount held back in the heyday of the subprime and Alt A MBS markets. Fannie plans...[Includes one data table]

Although the Consumer Financial Protection Bureau is still months away from officially clarifying certain parts of its complicated integrated disclosure rule known as TRID, the secondary market – and some attorneys – are already breathing a sigh of relief. But the big question remains: how far will the agency go? And will it provide enough clarity to ease the fears of buyers about being sued for monetary errors? The rule, which integrated consumer disclosures under the Truth in Lending Act and Real Estate Settlement Procedures Act, became...

Lenders are getting more comfortable with originating non-qualified mortgages, particularly as opportunities to complete refinances decline. Non-QMs accounted for 14.0 percent of mortgages originated by 159 banks in 2015, up from a 10.0 percent share of originations the previous year, according to a survey by the American Bankers Association. “More banks are adjusting underwriting criteria to target selected non-QM loan opportunities,” the trade group said. The ABA found...

After months of pleading by participants in the non-agency market, Consumer Financial Protection Bureau Director Richard Cordray said the agency will issue formal guidance regarding the TRID mortgage disclosure rule. The announcement last week regarding issues involving requirements under the Truth in Lending Act and the Real Estate Settlement Procedures Act prompted relief and apprehension among industry participants. And help for the non-agency market doesn’t appear to be moving quickly, as Cordray said the effort will start with a notice of proposed rulemaking in late July. Cordray revealed...

Announcements by two real estate investment trusts that are prominent in jumbo lending underscore two key themes in the market: increased competition and the lingering headache caused by the TRID disclosure rule. Redwood Trust recently launched an “expanded prime” program known as “Redwood Choice” for correspondent sellers. “The Choice program is a prime program that is fully documented, but with credit parameters outside our more recent underwriting guidelines,” Redwood said. Choice features...

Competition in the correspondent channel prompted EverBank Financial to slow its jumbo production, according to company officials. EverBank had $724.54 million in jumbo originations in the first quarter of 2016, down 32.5 percent from the previous quarter and down 44.3 percent from the first quarter of 2015. Officials said the reduction was focused in correspondent lending. The bank also has retail and consumer direct origination channels. Robert Clements, EverBank’s chairman and CEO, said...

Ongoing declines in the volume of subprime mortgages outstanding have done little to limit regulatory issues involving subprime servicing. An estimated $287.0 billion in subprime mortgages were outstanding as of the end of the first quarter of 2016, down 16.3 percent from the first quarter of 2015, according to a new ranking and analysis by Inside Nonconforming Markets. The Consumer Financial Protection Bureau released...[Includes one data table]

The costs of ongoing monitoring mandated by various regulators contributed to the large $111.2 million net loss posted by Ocwen Financial in the first quarter of 2016 that included $30.0 million in monitoring costs. Ocwen continues to make progress toward decreasing settlement-related costs though regulatory pressures persist. Ocwen’s monitor costs were...

Among the government-sponsored enterprises’ holdings of nonprime mortgages, non-agency mortgage-backed securities are declining much more quickly than purchased/guaranteed mortgages, according to an analysis by Inside Nonconforming Markets. The combined nonprime MBS holdings of Fannie Mae and Freddie Mac declined by 9.6 percent during the first quarter of 2016 compared with the end of 2015. The GSEs’ combined purchased/guaranteed holdings of subprime mortgages and Alt A mortgages declined by 4.1 percent in that time. Similar trends are evident on a yearly basis. MBS account...