Clean-up calls were recently completed on three jumbo MBS issued by Redwood Trust in 2010 and 2011, marking the first such actions on post-crisis jumbo MBS. While MBS investors can take some losses when clean-up calls are completed, analysts suggest that’s not currently much of a concern for post-crisis jumbo MBS. Holders of clean-up call rights, typically servicers, have an option to purchase the remaining loans in an MBS when the outstanding balance of the deal falls below a certain threshold. Redwood completed...

Fitch Ratings will allow for differences in third-party due diligence practices when rating various types of residential MBS, granting concessions to risk-sharing transactions from the government-sponsored enterprises. The firm released revised master-rating criteria late last week. Among the changes compared with criteria that were released in October was an allowance for differences among non-agency MBS backed by recent originations, transactions related to the GSEs and non-agency MBS backed by seasoned loans. While most jumbo MBS issued in recent years have included third-party due diligence reviews of 100 percent of the loans in a deal, the GSEs’ much larger risk-sharing transactions have been...

The Federal Housing Finance Agency’s recent final rule limiting membership in the Federal Home Loan Bank system will reduce funding for originations of non-qualified mortgages and other non-agency activity, according to industry analysts. In recent years, many real estate investment trusts gained access to FHLBank advances via captive insurance companies. A final rule from the FHFA this month closed that so-called loophole, with the regulator claiming that Congress didn’t ...

The trickle of jumbo mortgage-backed securities issuance seen since July will continue as WinWater Home Mortgage prepares to issue a $407.95 million deal. DBRS and Moody’s Investors Service issued presale reports on the planned MBS this week. WinWater Mortgage Loan Trust 2016-1 will be backed by qualified mortgages from 68 lenders, led by Caliber Home Loans with an 11.6 percent share, Ditech Financial (10.0 percent) and LoanDepot (8.0 percent). The deal consists of two pools ...

Officials at Impac Mortgage Holdings said originations of non-qualified mortgages are a “primary focus” for the lender this year. Impac has been one of the most prominent non-QM lenders, but production remains relatively low. Impac originated $48.0 million in non-QMs in the third quarter of 2015, the most recent figures available. The lender refers to these originations as AltQM products. Impac focused its early non-QM efforts in the wholesale channel and started offering non-QMs via ...

Parkside Mortgage Trust recently started operations with plans to acquire non-agency mortgages, including non-qualified mortgages. The first loan acquired by the real estate investment trust was a jumbo QM. Officials at PMT said Parkside Lending, an affiliate of the REIT, will service the mortgages. “This effort has been in the works for the past three years and we’re proud that it has finally come to fruition,” said Matthew Ostrander, president and chairman of PMT. “We’re excited to be entering ...

Redwood Trust announced last week that it will discontinue acquiring and aggregating conforming mortgages for resale to the government-sponsored enterprises. Officials at the real estate investment trust stressed that Redwood’s jumbo operations will continue. Redwood started selling conforming mortgages to Fannie Mae and Freddie Mac in 2014, acquiring $4.0 billion in conforming loans during the year along with $5.0 billion in jumbos. Through three quarters in 2015, Redwood had ...

The volume of non-agency mortgage-backed securities held by banks and thrifts has declined much more quickly than the amount of total non-agency MBS outstanding. Banks and thrifts held a total of $96.76 billion in non-agency MBS as of the end of the third quarter of 2015, down 28.4 percent compared with the end of the third quarter of 2014, according to a new analysis and ranking from the Inside Mortgage Finance Bank Mortgage Database. In that span ... [Includes one data chart]

The Securities and Exchange Commission announced on Wednesday that Ocwen Financial agreed to a $2.0 million settlement. The agreement covers misstatements of financial results due to a “flawed” methodology to value mortgage servicing rights and conflict-of-interest issues involving William Erbey, the former executive chairman of Ocwen. “Ocwen released inaccurate financial statements because its internal controls were inadequate and its audit committee failed to scrutinize ...

A&D Mortgage recently started offering non-qualified mortgages on a wholesale basis via mortgage brokers. The lender, whose originations are focused in southern Florida, noted that its underwriting for the loans includes “limited income and asset documentation” including options for stated income and stated assets. A&D offers non-QMs aimed at investors and foreign nationals. The lender said the loans are typically for non-owner-occupied ... [Includes four briefs]