New single-family MBS issuance accounted for a record 90.1 percent of home loan originations during the first quarter of 2013, according to a new Inside MBS & ABS analysis. An estimated $500.0 billion of new home mortgages were originated during the first three months of the year, down 4.8 percent from the fourth quarter of 2012, as refinance activity began to weaken. But mortgage securitization activity declined at a slower pace, falling just 0.6 percent in the first quarter. That pushed...[Includes one data chart]

The recent market tumult caused by suggestions that the Federal Reserve’s quantitative easing program (QE3) may soon be tapering off is likely over, and price adjustments may have created good buying opportunities in the non-agency MBS sector, according to analysts. With less than $1 trillion in MBS still outstanding in the market, and very few higher-yield investment options around, non-agency MBS remains a good investment choice, said Bank of America Merrill Lynch analysts Chris Flanagan, Ryan Asato and Justin Borst. In their latest market analysis, the BAML researchers said...

Officials at the Consumer Financial Protection Bureau claim that lenders will originate home loans that don’t meet the new qualified mortgage standard, though industry participants have been skeptical due to the liability involved with such loans. Raj Date, the former deputy director of the CFPB, announced last week that his new firm will indeed originate non-QMs, with an initial focus on non-agency jumbo mortgages. “It’s an example of a great market opportunity where we can ...

Bank and thrift holdings of mortgages were higher in the first quarter of 2013 compared to a year ago, driven by originations of nonconforming loans. While two banks have started to securitize jumbo mortgages, the vast majority of jumbo originations remain in portfolio. Bank holdings of first-lien mortgages hit $1.78 trillion at the end of the first quarter of 2013, up 2.2 percent from the first quarter of 2012, according to a new ranking and analysis by Inside Nonconforming Markets ... [Includes one data chart]

Redwood Trust’s latest non-agency jumbo mortgage-backed security, its eighth of the year, consisted of originations from 67 lenders. No lender accounts for more than 6.4 percent of the originations in the $460.16 million deal. The non-agency jumbo MBS issued this week received AAA ratings with credit enhancement of 7.10 percent on the top-rated tranche. The top contributors to the deal were George Mason Mortgage, Cole Taylor Mortgage, W.J. Bradley Mortgage Capital and PrimeLending, each accounting for ...

Lenders’ contributions to non-agency mortgage-backed securities could continue to be subjected to high levels of scrutiny as the rating services emphasize upfront due diligence. Standard & Poor’s recently cautioned investors in non-agency jumbo mortgage-backed securities from putting too much faith into the representations and warranties provided on new securities. “The fact remains that we believe loan and borrower quality are the most important factors for evaluating residential MBS ...

“People are finally calling us,” Dan Perl, CEO of the privately held Citadel Loan Servicing Corp. of Irvine, CA, told Inside Nonconforming Markets. He said the newly launched subprime or “hard money” lender is starting to gain traction. Perl said the origination business was slow two months ago, but Citadel is on track to fund $6 million to $8 million in mortgages in June. The lender is originating residential loans for borrowers with low credit scores, offering loan-to-value ratios up to 75 percent ...

A bill to reform the government-sponsored enterprises that is in the works in the Senate would reduce conforming loan limits at a much slower pace than many non-agency participants would like to see. Draft legislation from Sens. Bob Corker, R-TN, and Mark Warner, D-VA, has some bipartisan support in Congress, though it is unclear how far the bill will make it in Congress this year. The Secondary Mortgage Market Reform and Taxpayer Protection Act of 2013 would replace the Federal Housing Finance Agency with ...

Policymakers looking for a model to replace the government-sponsored enterprises should look no further than the non-agency jumbo market, according to Rep. Jeb Hensarling, R-TX, chairman of the House Financial Services Committee. “We don’t have to look overseas to see a well-functioning housing market without GSEs,” he said at a hearing this week. “Prior to the housing bust, the jumbo market was approximately 20 percent of the total housing market. There was capital, liquidity, competition ...

The Structured Finance Industry Group said it had substantive discussions with staff members at the Securities and Exchange Commission this week regarding loan-level data formats for mortgages. The SFIG said it plans to work with the Mortgage Bankers Association to potentially enhance the MBA’s Mortgage Industry Standards Maintenance Organization data fields. The SFIG said it is considering pushing for MISMO standards to be used in the government-sponsored enterprises’ risk-sharing ... [Includes three briefs]