Reverse-mortgage originations with FHA insurance rose in the first quarter of 2017 from the prior quarter and from the same period last year despite a long-term slowdown in Home Equity Conversion Mortgage activity, an analysis of agency data found. HECM lenders, including an increasing number of nonbanks, produced $4.5 billion in new HECM loans during the first three months of 2017, up 16.9 percent from the prior quarter. Production also was up 16.6 percent year-over year. Purchase reverse mortgages comprised 83.6 percent of HECMs produced during the period. Borrowers appeared to favor reverse mortgages with adjustable rates over fixed-rate HECMs, which accounted for only 10.7 percent of HECMs in the first quarter. Despite increased originations in the first quarter, FHA data show a gradual decline in HECM endorsements since peaking in FY 2009 with ... [Charts]

An industry trade group is requesting that the Consumer Financial Protection Bureau exclude reverse mortgages from the income-reporting requirement of the Home Mortgage Disclosure Act.The National Reverse Mortgage Lenders Association is seeking an exemption similar to the HMDA exemptions for rate spread; Home Ownership and Equity Protection Act status; origination charges; discount points; lender credits; total loan costs; points and fees; prepayment penalty term; and balloon payments. However, should the CFPB require income reporting on reverse mortgages, the NRMLA would want further guidance and clarification. Home Equity Conversion Mortgage loans make up over 99 percent of the reverse mortgage market today, and have not dropped below 85 percent since 1993, according to the group. NRMLA’s request is part of a broader comment on ...

Jumbo mortgage production declined 32.9 percent during the first quarter of 2017, along with virtually every other part of the home-loan market, according to a new Inside Mortgage Finance ranking and analysis. An estimated $70.0 billion of non-agency jumbo mortgages were originated during the first quarter, a 30.0 percent decline from the previous three-month period. In addition, some $29.0 billion of conforming-jumbo mortgages were delivered into Fannie Mae, Freddie Mac and Ginnie Mae mortgage-backed securities in the first three months of the year. These are loans on one-unit properties that exceed the baseline agency loan limits and are eligible because they’re secured by homes in designated high-cost markets. The agency-jumbo market was...[Includes three data tables]

Commercial banks and thrifts continued to have modest interest in holding non-mortgage ABS during the first quarter of 2017, according to a new Inside MBS & ABS ranking and analysis. The banking industry held $123.43 billion of ABS in its held-to-maturity and available-for-sale investment portfolios at the end of March. That was down 0.3 percent from December. The overall supply of ABS outstanding, excluding collateralized debt obligations, fell...[Includes two data tables]

Citadel Servicing Corp. and Angel Oak Companies – two of the most active nonprime lenders operating today – are looking at record originations for the second quarter and all of 2017. But don’t expect a torrent of conventional lenders to jump into the space anytime soon. According to interviews conducted by Inside Mortgage Finance in recent weeks, there’s plenty of interest in the “new” subprime market, a business predicated on sober loan-to-value ratios and rigorous underwriting, but most conventional lenders do not see it as safe. At least not yet. “Right now, there’s...

Two of the most active nonprime originators operating today may be headed in different directions when it comes to securitizing the non-qualified mortgages they’ve been originating. An official at the Angel Oak Companies told Inside MBS & ABS this week that the lender hopes to securitize at least once a quarter “going forward.” Citadel Servicing Corp., Irvine, CA, had hoped to issue its first security either late this month or in June, but appears to be pushing back its timetable. Dan Perl, CEO and founder of Citadel, declined...

Wells Fargo is planning to issue non-agency mortgage-backed securities backed by new originations this year, according to an official at the bank. The company was one of the top issuers of non-agency MBS before the financial crisis, but like most big banks, Wells has opted to retain its jumbo production in portfolio. “This year, one of our aspirations is to come back to the market with a couple of deals,” said Franklin Codel, senior executive vice president of consumer lending ...

Large servicers of jumbo mortgages continued to increase their holdings in the first quarter of 2017, according to a new ranking and analysis by Inside Nonconforming Markets. And delinquency performance improved on already low levels. The unpaid principal balance of jumbo mortgages serviced by a group of 30 companies hit $935.70 billion at the end of the first quarter of 2017, up 1.6 percent from the previous quarter and up 8.4 percent ... [Includes one data chart]

JPMorgan Chase is preparing to issue a $1.02 billion non-agency mortgage-backed security with jumbo mortgages along with loans eligible for sale to the government-sponsored enterprises. JPMorgan Mortgage Trust 2017-2 received preliminary AAA ratings last week from Kroll Bond Rating Agency and Moody’s Investors Service. The deal will be the second-largest non-agency MBS backed by post-crisis originations, topped only by the $1.03 billion security Chase issued in ...

Five Oaks Investment shut down its jumbo conduit operations but is still involved in the sector by providing a backstop to representations and warranties on jumbos originated by other lenders. The real estate investment trust is backstopping reps and warrants for mortgages sold on a loan exchange operated by MAXEX. “In July 2016, the company announced that it would no longer aggregate and securitize residential mortgage loans; however, given Five Oaks Acquisition ...