The Federal Reserve continues to be the largest investor in the MBS market, though it has long since stopped growing its portfolio…

The Structured Finance Industry Group this week put more flesh on the bones of its proposed deal-agent role in future non-agency MBS and introduced a plan for improved communications among MBS investors. The fifth edition of SFIG’s RMBS 3.0 Green Paper adds recommendations on data standardization, enforcement mechanisms for breaches of deal terms and materiality standards. The new proposal on bondholder communications was drafted...

New non-agency MBS issued in 2017 will likely include more diversified collateral and feature some structural changes, analysts at Moody’s Investors Service said in a new report this week. The rating service projected that non-agency prime jumbo volume will remain steady in 2017, while issuers will continue to explore non-traditional asset types, such as re-performing and non-performing loans, reverse mortgages, non-qualified mortgages and nonprime transactions. “Although prime jumbo deals will start to include loans with slightly lower FICOs and higher loan-to-value ratios than those loans included in 2016 transactions, collateral quality will remain...

“That’s a lot of work for an industry that apparently doesn’t exist,” said Richard Johns, SFIG’s executive director.

Caliber Home Loans was the only subprime servicer among the top 10 to increase its subprime portfolio compared with the third quarter of 2015

The loans funded by Sterling and Lendsure entailed the use of bank statements to verify borrower income.

The one weak spot in the mortgage market during the third quarter was in traditional jumbo originations, a trend that was reinforced by a significant increase in production of agency mortgages in high-cost markets that exceeded $417,000. An estimated $101.0 billion of non-agency jumbo home loans were originated during the third quarter, down 1.9 percent from the previous quarter. At the same time, production of conforming-jumbo mortgages – loans greater than $417,000 that were securitized by Fannie Mae, Freddie Mac and Ginnie Mae – jumped 27.7 percent from the second to the third quarter. Some of the disparity is...[Includes three data tables]

Perl is bullish on the non-agency market for the coming year and is thankful Citadel is not a Fannie/Freddie lender…

The third quarter saw a sharp increase in refinance originations that appeared to give a bigger boost to government and conventional-conforming production than the jumbo market got.

Of the $292.98 billion in non-agency jumbo mortgages originated in 2015, 3.1 percent were in areas where the loan balance would have been eligible for delivery to the GSEs under the loan limits set to take effect in January.