Issuance in the jumbo mortgage-backed securities market has nearly stopped in the first quarter of 2016, but not all issuers are ready to abandon the sector. “The securitization market has been slow to re-open but there’s a lot of optionality to that business to the extent that the banks’ lust for mortgages on their balance sheets changes in different interest rate environments,” said William Roth, CIO of Two Harbors Investment. “The ability for us to grow that business dramatically is there ...

Originating non-qualified mortgages remains a niche market. According to a recent survey of 200 lenders conducted by Lenders One, 64 percent of survey respondents say they originate non-QMs, though only 18 percent of the total respondents frequently originate the loans. Many of the lenders appear to be offering non-QMs to prime borrowers, with nonprime non-QMs much less common. Impac Mortgage Holdings is one of the most prominent lenders offering non-QMs ...

Bank and thrift holdings of home-equity loans declined by less than 1.0 percent in the fourth quarter of 2015 compared with the previous quarter, according to a new ranking from the Inside Mortgage Finance Bank Mortgage Database. Banks and thrifts held $944.33 billion in home-equity lines of credit, unused HELOC commitments and closed-end second liens in portfolio as of the end of the fourth quarter of 2015, down 0.8 percent from the third quarter ... [Includes one data chart]

Ginnie Mae securitization of jumbo mortgage loans with a VA guaranty rose significantly in 2015 despite a volume drop-off in the fourth quarter, according to Inside FHA/VA Lending’s analysis of agency data. Year-over-year results saw an almost 60 percent increase in Ginnie Mae mortgage securitization backed by VA jumbo loans. This was slightly dampened by 17.1 percent drop in VA MBS production in the fourth quarter from the previous quarter. All top-five VA jumbo securitizers – Wells Fargo, Freedom Mortgage Corp., PennyMac Corp., U.S. Bank, and Quicken Loans – reported significant drops quarter-over-quarter and year-over-year. Wells Fargo delivered a total of $5.0 billion in VA jumbo loans into Ginnie pools, making it the leading jumbo securitizer in that segment. This accounted for 17.7 percent of the market. Freedom Mortgage ended the year with $2.1 billion in ... [ Charts ]

Errors in TRID disclosures on jumbo mortgages played a key role in the recent closure of W.J. Bradley Mortgage, but the privately held nonbank may have had other problems as well, according to industry officials who claim to have intimate knowledge of the company’s operations. A thin capital base is one of those problems. An investor in the company and an investment banking official each told...

When it comes to attracting and retaining top loan originator talent in the era of the Consumer Financial Protection Bureau, it looks like independent shops may be the game to beat. One key issue now is whether depository institutions will step up to compete for the top talent in the mortgage space. “If we look back to 2008-2009, the brokers fled as quickly as they could to the independents, the depositories, just everywhere they could, to be able to operate and manage their business,” Drew Waterhouse, managing director of Hammerhouse LLC, said during an Inside Mortgage Finance webinar late last week. As the playing field has become more level with all the different regulations that have been brought to bear since then, “you see...

JPMorgan Chase is preparing to issue the first non-agency MBS that will comply with a securitization safe harbor established by the Federal Deposit Insurance Corp. in 2010, according to presale reports published this week. The $1.89 billion Chase Mortgage Trust 2016-1 received preliminary AAA ratings from Fitch Ratings and Moody’s Investors Service. According to Fitch, Chase will sell only the subordinateclasses to investors, retaining the senior tranche, which accounts for 87.7 percent of the MBS. To meet the FDIC safe-harbor requirements, Chase will also retain...

The development of the “deal agent” concept and the recommendations to standardize documentation are crucial to the revival of the non-agency MBS market, according to the Urban Institute. However, more work needs to be done to refine and implement the principles underlying the deal-agent concept and document standardization, said Laurie Goodman, director of the Housing Finance Policy Center at UI, in a new report. Many investors remain...

Mortgage lenders posted a sizable increase in home-equity loan originations last year, but the overall market fell to its lowest level since 2004. A new Inside Mortgage Finance analysis and ranking shows an estimated $182.6 billion in home-equity lending last year, mostly through home-equity lines of credit and, to a lesser extent, closed-end second mortgages. That was up 19.1 percent from a revised estimate of $153.3 billion back in 2014, somewhat slower than the 33.5 percent increase in first-lien originations in 2015. Home-equity originations declined...[Includes three data tables]

Falling oil prices may have little impact on residential MBS even if distressed prime jumbo borrowers in oil-producing states were to default on their loans, according to Standard & Poor’s. The rating agency’s optimistic conclusion may be good news to investors concerned that job cuts in the oil industry will lead to high default rates among prime jumbo borrowers, particularly in states where a high percentage of workers are in oil production. Market information suggests that values of prime jumbo MBS in oil-producing states are being affected, as the market factors in the risk of losses arising from borrower defaults in these regions, the S&P report said. However, it is unclear whether the additional spread on MBS with high concentrations ...