Securitization rates appeared to rebound strongly in the first quarter of 2017, with an estimated 79.5 percent of primary-market mortgage originations finding their way into a variety of MBS, according to a new Inside MBS & ABS analysis. That’s up from a 69.1 percent securitization rate for all of 2016 and, if it keeps up for the rest of 2017, it would be the highest mark since 2013. In the fourth quarter of 2016, the rate was 72.7 percent. Both new MBS production and primary-market originations were...[Includes one data table]

Investors in nonprime MBS may be more vulnerable to fraudulent or defective mortgages compared to prime transactions because of deficiencies or inadequacies in the related representation-and-warranties frameworks, according to a new report from analysts at Moody’s Investors Service. “The collateral backing these transactions is riskier than the loans in post-crisis prime jumbo RMBS, which also generally use stronger frameworks,” the report said. For starters, “Transactions in the re-emerging non-prime RMBS sector are...

Marketplace lender Social Finance – a mortgage originator with a track record in securitizing consumer and student loans – has filed for a state bank charter in Utah and is also pondering selling stock to the public. For now, the privately held technology-centric firm isn’t saying much about its plans, including the initial public offering. One source familiar with the company’s mortgage operation said SoFi recently hired one executive away from a larger player by dangling the IPO and stock options. To date, there has been...

Bank and thrift holdings of first-lien mortgages took a relatively rare decline in the first quarter of 2017 as jumbo production stalled during the period, according to a new ranking and analysis by Inside Nonconforming Markets. Banks and thrifts held a total of $1.93 trillion of first-lien residential mortgages in portfolio as of the end of March, down 0.1 percent from December 2016. The holdings have increased relatively steadily in recent years ... [Includes one data chart]

Affiliates of American International Group are set to issue their first jumbo mortgage-backed security, according to presale reports released this week. AIG’s residential mortgage lending group has been acquiring jumbos on a correspondent basis since 2013, amassing more than $4.50 billion in holdings. The planned CSMC 2017-HL1 Trust is a $511.98 million securitization of loans acquired from a variety of lenders. The MBS will be issued on a Credit Suisse shelf ...

The nonprime mortgage-backed security issued by Deephaven Mortgage earlier this month was largely similar to a deal the firm issued in April, save for a greater emphasis on mortgages underwritten with less than full documentation. So-called alternative documentation mortgages accounted for 36.5 percent of the $250.13 million MBS Deephaven issued this month, up from a 17.7 percent share of its $221.14 million issuance in April. Non-agency lenders underwriting mortgages ...

Representations and warranties on new nonprime mortgage-backed securities often include weaknesses that limit their ability to protect investors against fraudulent or defective loans, according to an analysis by Moody’s Investors Service. However, the rating service said current practices and dynamics in the nonprime MBS market help to mitigate the risks from weak reps and warranties. Moody’s hasn’t placed ratings on nonprime MBS backed by ... [Includes four briefs]

U.S. mortgage borrowers were somewhat less eager to tap the equity they have in their homes during the first quarter, but they have plenty of dry powder in a market that’s expected to continue tilting away from refinance lending. Originations of home-equity lines of credit and closed-end second mortgages fell 5.0 percent during the first quarter to an estimated $46.0 billion, according to a new Inside Mortgage Finance analysis. Compared to the sharp 33.6 percent drop in first-lien production, the home-equity sector virtually glowed. The supply of home-equity loans outstanding fell...[Includes three data tables]

Lenders originating nonprime mortgages have a number of different programs for borrowers shut out of the agency market, including an emphasis on reduced documentation requirements. Deephaven Mortgage is among the lenders that have pooled newly originated nonprime home loans into mortgage-backed securities. The company’s recent $250.13 million MBS included a variety of loans, largely focused on non-qualified mortgages. Some 82.6 percent of the loans in the deal were...

Ginnie Mae hit a milestone in the MBS market during the first quarter of 2017, edging past Freddie Mac to become the second-largest supplier of single-family MBS in the world. A new Inside MBS & ABS analysis reveals $1.705 trillion of Ginnie 1-4 family MBS outstanding at the end of March, a 2.2 percent increase in just three months. Meanwhile, outstanding single-family Freddie MBS rose 0.7 percent to $1.703 trillion. Both Ginnie and Freddie accounted...[Includes two data tables]