There will likely be a notable increase in the issuance of mortgage-backed securities backed by newly originated nonprime mortgages, according to Fitch Ratings. As many as eight firms are looking to join Lone Star Funds in issuing rated deals, though issuance isn’t expected to get anywhere near the levels seen in the run up to the financial crisis. Some $999.5 million in nonprime MBS was issued in 2016, according to the rating service. “Fitch estimates those figures could double in 2017, and ...

Redwood Trust is moving relatively quickly to issue its second jumbo mortgage-backed security of 2017. The firm is planning a $347.85 million transaction, according to a presale report from Kroll Bond Rating Agency. Sequoia Mortgage Trust 2017-2 is scheduled to close Feb. 17, about a month after Redwood closed a $342.93 million issuance. The burst of activity suggests that Redwood is seeing relatively strong pricing for jumbo MBS. Officials at Redwood couldn’t comment on ...

Two banks dominated contributions to prime non-agency mortgage-backed securities issued in the past two years, according to a new ranking and analysis by Inside Nonconforming Markets. And a majority of the top 10 contributors to prime jumbo MBS were banks or affiliated with banks. JPMorgan Chase accounted for $4.58 billion of the prime mortgages included in prime non-agency MBS in 2015 and 2016, a 22.1 percent share of total issuance ... [Includes one data chart]

With the Federal Reserve expected to raise its benchmark overnight lending rate this year, interest rates on new mortgages are also projected to go up. Higher rates on mortgages are likely to cause a significant decline in prepayments on post-crisis jumbo mortgages and will increase default risk, according to Morningstar Credit Ratings. Within the first 12 months of origination, prepayment rates on post-crisis jumbos included in non-agency mortgage-backed securities have ...

PennyMac Financial Services has significantly curtailed its originations of jumbo mortgages in recent years, and ended 2016 nearly out of the sector all together. PennyMac didn’t have any jumbo originations in the fourth quarter and as of the end of 2016, the nonbank only had $1.0 million in locked jumbos in its pipeline.Citigroup has entered into a subservicing agreement with Cenlar for the bank’s non-agency mortgages. Servicing is expected to be transferred ... [Includes four briefs]

Real estate brokerage firm Redfin is preparing to offer purchase mortgages to homebuyers who use the firm’s real estate agents. The company announced Redfin Mortgage last week, promising a “digital mortgage,” low interest rates and faster closing times. The new lender will be led by Jason Bateman, a former executive vice president of mortgage operations at BBVA Compass. “When your real estate agent, title professional and lender work together, you win,” he said. “Lenders should spend their time determining which loan is right for a customer, not looking for new customers.” Initially, Redfin Mortgage plans...

Three of the nation’s most active nonprime mortgage originators – Citadel Loan Servicing, Angel Oak and Deephaven Mortgage – are all working on new MBS deals, a bullish sign for a market that has been mostly dormant for years. Executives at all three shops confirmed to Inside MBS & ABS this week their intention to bring new MBS to market – most likely through rated transactions. As for details, that’s a different matter. All three are...

The subprime auto lending market is stable and the underwriting is strong, but delinquencies are up, according to credit bureau experts speaking at the American Financial Services Association’s vehicle financing conference. The auto financing industry is coming off another record year of sales, according to Chris Stinebert, president and CEO of AFSA. He added that it’s important for credit reporting agencies to set the record straight on the health of the subprime auto finance market. “The fact is...

With the post-election interest-rate rise sticking around, there’s a growing school of thought that residential originators will finally ease underwriting standards in an effort to boost lending volume. But the way things stand today, that could be wishful thinking. The Mortgage Bankers Association told Inside Mortgage Finance this week that its Mortgage Credit Availability Index shows a “gradual” loosening has occurred, but it credits a greater availability of jumbo product for the reading. As MBA Senior Vice President of Research Michael Fratantoni put...

The jumbo mortgage-backed security Redwood Trust is set to issue on Jan. 20 received improved pricing compared with the company’s previous deal issued in October. The new MBS is fairly similar to the prior bond, indicating stronger demand from investors. The $343.28 million Sequoia Mortgage Trust 2017-1 priced last week. The super-senior tranche priced 1-20 back of Fannie 3.5s, which was four ticks tighter than Redwood’s previous offering, according to an analysis by Wells Fargo Securities ...