After a relatively strong first eight months of the year, no jumbo MBS were issued in September or October. Although investor interest seems tepid, the market is showing signs of life as Citigroup issued its first post-crisis jumbo MBS this week, and Redwood Trust offered its first jumbo deal since August. The activity comes just weeks after Shellpoint Partners tried twice to sell a jumbo MBS, eventually pulling the deal and opting for a whole-loan sale. Pricing for jumbo MBS has improved enough for Citi and Redwood to test the market, and investors have also shown strong interest in other recent non-agency offerings. The $209.95 million Citigroup Mortgage Loan Trust 2013-J1 received...

U.S. Bank, as trustee for a mortgage loan trust, has sued Citigroup in New York state court to force the financial giant to cure or repurchase defective loans from a securitized pool. In a separate case, a federal court in New York dismissed a shareholder action against Citigroup in connection with certain residential MBS. At issue in the first case is a pool of 4,792 mortgage loans that Citigroup Global Markets Realty Corp. purchased and securitized in May 2007. Citigroup sold the loans to Citigroup Mortgage Loan Trust, which, in turn, deposited the loans into the trust and assigned its rights to U.S. Bank. The trust then issued the MBS. According to the court summons and notice, Citigroup conducted...

Glenn Costello, a senior managing director at KBRA, said the securitization of non-QM loans will require additional credit enhancement relative to QMs.

The bipartisan Senate blueprint for secondary mortgage market reform includes several key provisions designed to facilitate small-lender access when Fannie Mae and Freddie Mac are no longer around.

Most outstanding adjustable-rate mortgages have already reset, eliminating concerns about payment shock as interest rates increase, according to a new analysis by Lender Processing Services. However, home-equity loan performance is expected to deteriorate. Some 63 percent of outstanding ARMs have reset, according to LPS. And more than 75 percent of the ARMs scheduled to reset were originated after 2008. “We’re not seeing a significant effect that could cause new problem loans or any resurgence in ...

bivey@imfpubs.com Walter Investment Management is the latest servicer to transition to a “capital lite” business model, announcing the formation of a REIT to hold mortgage servicing rights. Walter said the new Walter Capital Opportunity unit will acquire certain MSRs while Walter Investment Management subservices the loans. Rival special servicers Nationstar Mortgage and Ocwen Financial have already created or partnered with similar affiliated MSR investors and Two Harbors Investment, a REIT, announced a like-minded agreement with PHH this…

Redwood started acquiring agency mortgages from correspondent lenders in mid-October. The REIT noted that the activity helps create mortgage servicing rights for it to invest in.

How many loans per month should a loan officer be closing when times are lean? According to Dave Lykken of Mortgage Banking Solutions, if an LO isn’t closing at least six loans per month, they might want to consider employment elsewhere.

The REIT is just starting to purchase MSRs. At the end of September it had $15.7 million of mortgage servicing rights on its balance sheet, but that figure should rapidly change in the quarters ahead.

The loans in the new Redwood deal have the strong characteristics associated with jumbos, including an average credit score of 766 and a combined loan-to-value ratio of almost 71 percent.