A moratorium of real estate investment trusts gaining membership in the Federal Home Loan Bank system ended recently when the captive insurer of Five Oaks Investment was approved as a member of the FHLBank of Indianapolis. The REIT revealed this week that Five Oaks Insurance gained FHLBank membership on Feb. 24. “FOI is currently negotiating agreements for advances with the FHLBank and, although no assurance can be given, FOI anticipates ...

The two main types of representation-and-warranty frameworks used in jumbo mortgage-backed securities can both effectively protect investors, according to Moody’s Investors Service. Each framework presents different risks, and industry participants suggest that other aspects of deals carry more importance for investors. Jumbo MBS issued in recent years have largely included either an open-ended rep-and-warrant framework or a prescriptive framework ...

Originations of adjustable-rate mortgages were nearly level in 2014 compared with the previous year, according to a new ranking by Inside Nonconforming Markets. The ARM share of total originations increased because mortgage production overall was down in that time, though some big banks that dominate ARM originations also slowed their production. An estimated $198.0 billion in ARMs were originated in 2014, up 1.0 percent ... [Includes one data chart]

Non-agency servicers participating in the Home Affordable Modification Program have room for improvement, according to the latest testing results completed on behalf of the Treasury Department. While no servicers were in danger of having HAMP incentive payments withheld, the Treasury said Nationstar Mortgage, Ocwen Financial and Select Portfolio Servicing were all in need of “moderate” improvement as of the fourth quarter of 2014 ... [Includes one data chart]

Thirty-year fixed-rate mortgages have served borrowers relatively well, but there are issues that could be addressed by an alternative product, according to new research from staff at the Federal Reserve Bank of New York. “Ideally, an alternate mortgage instrument would alleviate the downpayment constraint associated with the transition to homeownership, eliminate any scope for discrimination in mortgage qualification or pricing and allow ...

The outstanding balance of non-agency mortgage-backed securities increased in February on a monthly basis, according to a Standard & Poor’s analysis of remittance data. The increase was a rare occurrence as non-agency MBS outstanding has regularly declined since 2009. Of the more than 20,000 jumbo mortgages Redwood Trust has acquired as part of its jumbo conduit activities since 2010, only 11 have gone 60-plus days delinquent ... [Includes five briefs]

Security issuances backed by FHA and VA loans totaled $267.6 billion in 2014, with several large states accounting for a significant share of FHA/VA originations. An estimated $158.1 billion of FHA-insured loans, including modified loans, were securitized last year, with purchase home loans comprising most of the transactions. Approximately $30.0 billion of FHA refinance loans were securitized as well. The FHA MBS had an average loan-to-value ratio of 92.3 percent and a debt-to-income ratio of 40.1 percent. The average FICO score was 672.3, which was indicative of first-time homebuyers and borrowers with slightly tainted credit. First-ranked California, Texas (#2) and Florida (#3) combined for a total of $48.0 billion, which represented 30.3 percent of FHA loans in Ginnie Mae mortgage-backed securities in 2014. Fourth-ranked New York reported a total of $6.7 billion while ... [ 2 charts]

Consumer advocates and attorneys are urging the Department of Housing and Urban Development to delay the implementation of a new policy that purports to provide relief to surviving spouses of reverse-mortgage borrowers and to find solutions that are more effective. The group said the policy HUD announced in Mortgagee Letter 2015-03 on Jan. 29 is so restrictive that virtually all surviving non-borrowing spouses will get no relief. A letter to the agency, drafted by the National Consumer Law Center and signed by the Consumers Union, California Reinvestment Coalition, National Housing Law Project, Housing and Economic Rights Advocates and Institute on Aging denounced the new policy. They said most surviving spouses of deceased borrowers of Home Equity Conversion Mortgage loans will not be able to meet the policy’s stringent guidelines and will ...

More than a year after standards for qualified mortgages took effect, a number of lenders are willing to offer non-QMs, but production has been concentrated on affluent borrowers. Lenders seem less willing to offer non-QMs to borrowers with lower credit scores or higher loan-to-value ratios. For the past year, Nationstar Mortgage has been working toward offering a non-QM refinance product. The loan would target non-agency borrowers in the nonbank’s large servicing ...