Production of interest-only mortgages by a select group of lenders increased by more than 65% in the second quarter. Data from HMDA provides new insight on the characteristics of IO borrowers. (Includes data chart.)

The Treasury report on housing-finance reform included a number of suggestions on how federal regulators could promote a level playing field between the GSEs and non-agency players.

In comments on ways to address the end of the qualified mortgage patch, the Treasury suggested using a bright-line test while Redwood cautioned against using a metric based on the interest rate of a mortgage.

Servicing portfolios stocked with jumbo mortgages continued to steadily increase in the second quarter. However, portfolio growth at the top two servicers hasn’t kept pace with the market overall.

Servicing portfolios at most of the major subprime servicers are shrinking, except at Citadel Servicing. The firm has more than doubled its servicing portfolio in the past year.

Among the top five states for originations of non-agency jumbos in 2018, production increased only in Florida on an annual basis. California remains the top state for jumbo lending.

The top correspondent sellers of jumbo mortgages vary in where they sell loans. About half of sales in 2018 were to banks, about a third went to nonbanks and the rest was delivered directly to non-agency MBS.

Activity in the non-agency MBS market is resuming after a slowdown in the second half of August. Presale reports for five deals have been published this month, led by prime non-agency MBS.