In exploring how to attract more private capital into the housing finance system, policymakers should permit the jumbo mortgage market to stand on its own absent a government guaranty and make any future government backing explicit, experts told members of the Senate Banking Subcommittee on Securities, Insurance and Investment this week. Given that loans over the old $417,000 conforming limit account for a quarter of the dollar volume of mortgages per year, a slow and measured hand off of this segment to private capital is a low-maintenance way to reduce the government’s mortgage footprint, according to Mark Willis, resident research fellow at the New York University Furman Center for Real Estate and Urban Policy. Inside Mortgage Finance estimates that loans exceeding $417,000 accounted for 16.8 percent of originations in 2012. “Opening up the market above $417,000 should provide...

Feedback from residential servicers indicates that the number of new loan modifications on mortgages in non-agency MBS this year will be near levels seen last year.

Guaranty fees need to be raised by roughly 10 basis points in order for the pricing between agency and non-agency deals to be comparable, according to a new report.

Is the warehouse lending community closed to new subprime lenders, even if they have high downpayment requirements?

A planned MBS from Shellpoint could provide more liquidity for loans made to self-employed borrowers.

One mortgage expert warns that lowering GSE loan limits one step at a time to $417,000 could leave parts of the residential market underserved.

If. Sen. Franken has his way, the MBS rating system will change. Meanwhile, top executives at Impac Mortgage clean up.

Redwood Trust is ready to sell yet another jumbo MBS deal into the market.

Officials at Redwood Trust suggest that the change in pricing for AAA tranches on new non-agency MBS in recent months has been driven by supply and demand, not concerns about the quality of issuance. “The market had come too far, too fast, and the supply and demand imbalance initiated a correction,” Redwood said. The premium on Redwood’s latest transaction was about 1.75 percentage points above an interest rate benchmark, resulting in a 2.59 percent premium for investors. Redwood said deals it issued in January sold with premiums as low as 97 basis points with yields of less than 200 bps for investors. The real estate investment trust said...

As more firms contemplate issuing jumbo MBS, there are growing concerns that there could be a few speed bumps along the way, namely rising whole loan prices, and an increase in the cost of money for investors that use swaps to fund their purchases of the AAA-rated tranches. The increase in whole loan prices is less of a concern, because it was somewhat anticipated given the “hot” nature of the market. Over the past few months, prices for jumbo whole loans have risen to as high as 103, compared to 101 and 102 last year. Craig Cole, a jumbo consultant and a former top production manager at Union Bank, San Francisco, told...