Loan standards are not loosening on conventional mortgages, but in the jumbo space the story is entirely different.

A widely-expected reduction in conforming loan limits for 2014 would help the jumbo market continue to broaden its footprint in mortgage originations, but the impact would be largely confined to a handful of states, according to a new Inside Mortgage Finance analysis. Jumbo production – originations of home loans that exceed varying conforming loan limits around the country – has been the brightest spot in a mortgage outlook made increasingly gloomy by rising interest rates. Non-agency jumbo originations rose 9.3 percent from the first to the second quarter, while total originations of Fannie Mae, Freddie Mac and FHA loans fell 3.8 percent. Jumbo mortgages accounted...[Includes four data charts]

Two years ago, no megabank in its right mind would dare originate a jumbo mortgage without asking for at least a 20 percent downpayment – unless the borrower was a special client of the company’s wealth management division. Today, it’s a different story. As refi volumes begin to dwindle, a handful of large banks are loosening their jumbo underwriting standards, allowing for lower downpayment requirements and higher debt-to-income ratios. Wells Fargo has been offering...

A number of lenders in July stopped offering mortgages with characteristics outside of those allowed for qualified mortgages, according to the Mortgage Bankers Association. The MBA said credit availability declined in August after four months of loosening. “The slight decline in the Mortgage Credit Availability Index in August reflected a reduction in the availability of certain loan features, particularly interest-only and terms exceeding 30 years,” said Mike Fratantoni, the MBA’s vice president of research and economics. “As these loan features are outside of the QM definition, these changes may reflect the beginning of QM implementation, and the fact that Fannie Mae and Freddie Mac are limited to acquiring loans that meet the QM definition.” The MCAI is...

The city council’s favorable vote represents a rare notch in the win column for MRP, which has suffered numerous defeats in local jurisdictions across the nation, likely at a substantial loss to the firm’s financial backers.

It's been five long years since Uncle Sam seized Fannie Mae and Freddie Mac. Is time to give them back to shareholders?

Publicly traded REITs like Redwood Trust would fill the void if Fannie Mae and Freddie Mac lower loan limits next year. But they will be competing against portfolio lenders.

Nonbanks are stepping up to the plate on agency MBS. Meanwhile, a handful of large "term" loans are being put together, allowing investors to finance MSRs.

The firm’s deal will be financed with bonds that are expected to have a five-year maturity, a floating-rate coupon and a rating from a major rating service.

If the Federal Housing Finance Agency lowers loan limits for Fannie Mae and Freddie Mac next year, Redwood Trust says it is ready, willing and able to pick up the slack. “If that happens, Redwood will step up and fund those loans, no problem,” said Mike McMahon, managing director of the real estate investment trust, the most active jumbo MBS issuer in the non-agency market. The executive told Inside MBS & ABS that he’s certain that Redwood would have plenty of company as well. “There will be little or no disruption in the market,” he said. According to McMahon, in 2012 lenders produced...