Real estate investment trusts that specialize in residential MBS posted a slight increase in their agency MBS holdings during the second quarter of 2016, along with a drop in non-agency MBS. The 16 publicly traded mortgage REITs tracked by Inside MBS & ABS had a combined residential MBS portfolio of $234.65 billion at the end of June, a gain of 0.9 percent from the previous quarter. However, 11 of the institutions reported declining balances, including the two largest REITs at the top of the ranking. Two Harbors Investment reported...[Includes one data table]

Over the past week, two nonprime MBS deals came to light: a $138.89 million bond issued by Deephaven Residential Mortgage Trust and a $119.38 million security from Angel Oak Real Estate Investment Trust. Both deals were private placements backed by newly originated mortgages and underwritten by Wall Street veterans Credit Suisse and Nomura Securities. Although both were publicized this week, the transactions – which were not rated – closed...

One of the fastest-growing top-10 originators, loanDepot, this month came to market with a $150 million debt financing deal that portends good things for other firms looking to raise capital in a tough stock market. “The cost of money has really come down for nonbanks,” said consultant Paul Hindman. The privately held loanDepot disclosed...

A total of $333.1 billion of residential MBS backed by freshly originated home loans were issued during the second quarter of 2016, a 30.3 percent increase over the first three months of the year. But that trailed the 34.2 percent surge in primary-market originations during the same period. The result was a further decline in the mortgage securitization rate, from 67.3 percent in the first quarter to 65.3 percent in the second, according to a new Inside MBS & ABS analysis. It marked the lowest securitization rate since 2004, when the non-agency MBS market was just beginning to take off. The biggest decline was...[Includes one data table]

Strong competition among big banks helped increase originations of jumbo mortgages during the second quarter, according to a new ranking and analysis by Inside Nonconforming Markets. An estimated $101.0 billion in jumbos were originated in the second quarter, up 31.2 percent from the previous quarter. Through the first half of 2016, an estimated $178.0 billion in jumbos were originated, a 7.9 percent increase from the first half of 2015. Jumbo mortgages ... [Includes one data chart]

The market for mortgage-backed securities backed by newly originated nonprime mortgages received a jolt this month as Angel Oak Capital Advisors and Deephaven Mortgage separately issued new deals, according to offering documents obtained by Inside Nonconforming Markets. Angel Oak Mortgage Trust I, LLC 2016-1 was backed by mortgages with an unpaid principal balance of $132.65 million and Deephaven Residential Mortgage Trust 2016-1 was ...

JPMorgan Chase is preparing to issue a $302.27 million jumbo mortgage-backed security where non-qualified mortgages will account for 20.2 percent of the loan balance, according to presale reports. All of the mortgages in the planned JPMorgan Mortgage Trust 2016-2 were originated by First Republic Bank via the retail channel. Most prime MBS issued since QM standards took effect in 2014 have been backed solely by QMs and the few deals that have included non-QMs tend ...

Redwood Trust has no plans to suspend issuance of jumbo mortgage-backed securities, according to Kristin Brown, a vice president and head of investor relations at Redwood. The Redwood official was responding to a report by Asset-Backed Alert, which cited anonymous sources claiming that the real estate investment trust will issue a jumbo MBS during the third quarter then “pull back from the market indefinitely.” Brown said that while additional transactions are always ...

Officials at Luther Burbank Savings see promise in the types of jumbo mortgages that many larger banks aren’t willing to originate in significant numbers: non-qualified mortgages. Jason Pendergist, president of consumer and commercial banking at Luther Burbank, said there’s a “massive opportunity” in non-QM jumbo mortgages. He said Luther Burbank focuses its originations on prime jumbo borrowers and first-time homeowners. Big banks have been willing to offer ...

The new nonprime mortgage-backed securities from Angel Oak Capital Advisors and Deephaven Mortgage included a number of mortgages with compliance issues relating to the TILA-RESPA Integrated Disclosure rule, according to offering documents obtained by Inside Nonconforming Markets. Part of the compliance issues stem from the ongoing uncertainty regarding cures for minor errors. While the Consumer Financial Protection Bureau issued a proposed rule ...