Affiliates of New Residential Investment and CarVal Investors packaged re-performing mortgages with a total unpaid principal balance of more than $1 billion for two separate MBS that will be issued this month. There’s plenty of supply of seasoned mortgages in the secondary market, but higher interest rates could weaken demand, according to industry analysts. An affiliate of CarVal Investors priced a $395.3 million non-agency MBS late last week with more variety in collateral than the typical MBS backed by seasoned mortgages. In addition to re-performing mortgages, Mill City Mortgage Loan Trust 2017-1 included some home-equity lines of credit and newly originated mortgages. Vintage HELOCs accounted...

The retail channel remains the predominant source of jumbo originations, according to an Inside Nonconforming Markets analysis of survey responses collected by Inside Mortgage Finance. Among the top jumbo lenders, more than four out of five jumbos originated during the fourth quarter of 2016 were through the retail channel. The 81.6 percent retail share of jumbo originations was up from a 79.3 percent share in the fourth quarter of 2015 ... [Includes one data chart]

For the second time in five months, mortgages aggregated by Bank of America will be included in a jumbo mortgage-backed security. In both instances, BofA has sold loans to New Penn Financial, with an affiliate of New Penn issuing the MBS. The $280.38 million Shellpoint Co-Originator Trust 2017-1 is scheduled to close at the end of this month. Mortgages aggregated by BofA account for 98.7 percent of the dollar volume of the MBS, according to presale reports by Kroll Bond Rating Agency and ...

Bank and thrift holdings of first-lien portfolios continued to increase at the end of 2016, according to an Inside Nonconforming Markets analysis of bank and thrift call reports. Banks and thrifts held $1.93 trillion in first liens at the end of the year, up 0.4 percent from the third quarter of 2016 and up 3.4 percent from the end of 2015. New additions to the portfolios are generally jumbo mortgages along with some loans eligible for sale to the government- ... [Includes one data chart]

Galton Funding, a new entrant to the jumbo mortgage-backed security market, allows for jumbos with somewhat looser underwriting criteria than typically used in jumbo MBS issued in recent years. The company noted that its programs are aimed at “underserved” borrowers. Moody’s Investors Service said Galton has two prime loan programs: A+ and A. Both allow for more lenient underwriting than other prime jumbo programs and instead align in some instances with ...

More than half of Redwood Trust’s 406 sellers have started offering the company’s “expanded-prime” jumbo product. Company officials said they’re aiming for the Choice product to account for 15.0 percent to 20.0 percent of Redwood’s jumbo volume this year. The firm launched the Choice product in April, allowing mortgages with debt-to-income ratios up to 49.9 percent, loan-to-value ratios up to 90.0 percent or credit scores as low as 661. Choice mortgages tend to have LTV ratios ...

Individuals with bad or no credit who are thinking about taking out a mortgage should proceed with caution if a lender has offered them a subprime loan, an official from the CFPB advised recently. In a blog posting last week, Megan Thibos, a policy analyst with the CFPB’s mortgage markets team, talked about the homebuying process for people with poor credit scores. Thibos suggested that borrowers should review their credit scores, make sure their credit reports are correct, and work to rebuild their credit. Then she detailed various mortgage options available to borrowers with poor credit, focusing on FHA mortgages. That was followed by “a warning about subprime mortgages.” Thibos said subprime mortgages have significantly higher interest rates than prime ...

The U.S. banking industry is a steady, but not a huge, supporter of the non-mortgage-ABS market, accounting for 17.4 percent of the supply of ABS outstanding at the end of 2016, according to a new call-report analysis by Inside MBS & ABS. By comparison, banks and thrifts held about 26.5 percent of MBS outstanding at yearend. Although ABS issuance since the financial crisis has dwarfed production of non-agency MBS, the market still hasn’t fully recovered. The Securities Industry and Financial Markets Association reports that total ABS outstanding – not including collateralized debt obligations – declined by 0.3 percent during the fourth quarter to $712.1 billion. That’s still well below the total outstanding at the end of 2007, $899.8 billion. Commercial banks and thrifts reported...[Includes two data tables]

The correspondent lending channel was the big winner last year in terms of increased production and market share – at least in the conventional-conforming and jumbo sectors, according to a new analysis by Inside Mortgage Trends. Competition among the three main production channels evened out in the government-insured market. Correspondent production of conventional-conforming mortgages increased...

Homeowners over the age of 65 rarely use their mortgages to access their home equity, according to a new study by the Urban Institute and Fannie Mae. Even as a large number of seniors reported concerns about finances during retirement, Fannie noted that just 6 percent of older adult homeowners are interested in tapping their home equity. Relatively few seniors use FHA reverse mortgages, closed-end seconds, home-equity lines of credit and cash-out refinances to tap built-up home equity. One reason seniors hesitate...