The outstanding supply of single-family MBS in the market fell slightly in the first quarter, but you have to go two paces to the right of the decimal point to see it. A new Inside MBS & ABS analysis indicates that outstanding MBS totaled $6.407 trillion as of the end of March. That was down 0.01 percent from the previous quarter, stalling a steady expansion of the market that took place in 2015. And with a modest 0.2 percent increase in total single-family mortgage debt outstanding, the modest contraction in MBS nudged...[Includes two data tables]

Lone Star Funds is preparing to issue a $161.71 million nonprime mortgage-backed security that will close next week. COLT 2016-1 Mortgage Loan Trust received an A rating from DBRS and Fitch Ratings. The deal marks the first nonprime MBS backed by new originations to receive a rating since the financial crisis. It will also be the largest post-crisis nonprime MBS issued to date, topping a $150.35 million MBS from Angel Oak Capital Advisors in December. Officials at Fitch Ratings said ...

Wells Fargo services more than a third of the jumbo mortgages serviced by the top 30 lenders in the sector, according to a new analysis by Inside Nonconforming Markets. Wells serviced a portfolio of jumbo mortgages with an unpaid principal balance of $268.16 billion as of the end of the first quarter of 2016. The bank’s jumbo servicing portfolio increased by 13.0 percent compared with the first quarter of 2015. The group of 30 companies handled ... [Includes one data chart]

Performance data on nonprime mortgages originated by Caliber Home Loans in recent years suggest that it’s possible to originate loans to borrowers who don’t qualify for agency financing without experiencing major delinquencies. Caliber started originating non-agency mortgages in its portfolio loan program in the fourth quarter of 2014. None of the mortgages have been 60 or more days past due, according to a term sheet for a pending nonprime mortgage-backed security ...

The issuance of three non-agency mortgage-backed securities in quick succession suggests that industry participants have adjusted to liability posed by the Truth in Lending Act/Real Estate Settlement Procedures Act disclosure rule. Jumbo MBS from JPMorgan Chase and Redwood Trust along with a nonprime MBS from Lone Star Funds all included mortgages subject to TRID and loans with TRID exceptions. TRID was seen as a major impediment to non-agency MBS issuance ...

A $412.66 million jumbo mortgage-backed security planned by a unit of JPMorgan Chase received high marks from rating services save for the representations-and-warranty framework on the MBS. Presale reports on JPMorgan Mortgage Trust 2016-1 were published last week, with AAA ratings from DBRS, Fitch Ratings and Moody’s Investors Service. Some 15 lenders contributed to the planned MBS, led by New Penn Financial with a 19.7 percent share, Primary Capital Mortgage ...

According to investors in scratch-and-dent TRID mortgages and traders who play in the space, auctions of mortgages with errors (of all sorts) have continued apace ever since the CFPB announcement on TRID 2.0 rulemaking in early May and show little sign of slowing down. At the same time, the TRID mortgage disclosure rule appears to be less of an obstacle for the jumbo mortgage-backed securities market these days as JPMorgan Chase prepares a deal that will include residential loans subject to the rule.

Commercial banks and thrifts reported a further decline in their holdings of non-mortgage ABS during the first quarter, according to a new Inside MBS & ABS analysis of call-report data. As of the end of March, banks held a combined $131.96 billion of ABS in their portfolio, including assets intended to be held to maturity as well as those available for sale. That represented a 2.3 percent drop from the end of 2015, and a hefty 15.9 percent decline from a year ago. It was...[Includes two data tables]

A $161.71 million MBS planned by Lone Star Funds backed by newly originated nonprime mortgages received an A rating this week from DBRS and Fitch Ratings. The deal is the first post-crisis nonprime MBS to receive a credit rating and it will be the largest post-crisis nonprime MBS issued to date. The rating services stressed that while the mortgages originated by Lone Star’s Caliber Home Loans are generally nonprime, the underwriting on the loans is relatively strong. However, Fitch said it capped the rating at A due to the limited nonprime performance of Caliber and Hudson Americas, the asset manager for the MBS. “As more post-crisis non-prime performance is established while upholding appropriate controls, Fitch will consider...

The so-called TRID-lock seen in the jumbo MBS market since October appears to be easing as both Redwood Trust and JPMorgan Chase have come to market with deals that include some loans with compliance problems. Before this week, only one jumbo MBS included mortgages subject to TRID, a deal from Two Harbors Investment in March. Many industry participants blamed...