Originations of non-agency jumbo mortgages in 2015 outpaced total originations, helping to increase the jumbo sector’s market share, according to a new ranking and analysis by Inside Nonconforming Markets. Fueled by bank demand, an estimated $328.0 billion in jumbos were originated in 2015, up 39.6 percent compared with 2014. Total first-lien originations increased by 33.5 percent in 2015 compared with the previous year, according to ... [Includes one data chart]

Borrower demand for jumbo mortgages declined somewhat in the fourth quarter of 2015 compared with the previous quarter, and banks plan on loosening underwriting standards for the loans, according to the Federal Reserve’s senior loan officer opinion survey. Industry participants stress that underwriting standards for jumbos remain strong, with poor performance unlikely. Senior LOs were asked to evaluate demand for purchase mortgages in the fourth quarter of 2015 ...

Home prices in California and other states where jumbo mortgages are concentrated are “overheating,” according to analysts at Fitch Ratings. The firm said rapid home price growth in parts of California, Florida and Texas appears to be exceeding fundamentals. Fitch estimates that homes in most major metropolitan areas in those states are currently overpriced. Grant Bailey, a managing director at Fitch, said home prices in the San Francisco area are a particular concern ...

Two Harbors Investment is focusing on jumbo mortgage conduit activities in an effort to differentiate itself from other real estate investment trusts. The REIT issued the most jumbo MBS in 2015, based on deal count, and is one of only two firms to have issued a jumbo MBS this year. Officials noted that the REIT is working to reduce its investments in agency MBS with an eye toward allocating capital to sectors with more attractive returns, including conduit operations ...

Don’t tell Bernie Sanders this, but the upper class appeared to suffer less than other folks during the fourth-quarter decline in mortgage production, according to a new Inside Mortgage Finance ranking and analysis. Mortgage lenders produced an estimated $78 billion of big-ticket home loans to, hopefully, well-to-do borrowers during the final three months of last year. That was down 8.2 percent from the third quarter, a little over half the rate of decline in total mortgage originations during the period. For the full year, jumbo mortgages accounted...[Includes two data tables]

The Blackstone Group this week continued its expanding reach into the mortgage industry, agreeing to buy – through an affiliate – Interactive Mortgage Advisors, Denver, one of the busiest sellers of mortgage servicing rights in the nation. No purchase price was revealed. IMA is being sold through an “asset” transfer. Its trading desk affiliate, Spurs Capital, is not part of the transaction, though the two firms will maintain a working relationship. In the fourth quarter, IMA brokered...

While home price gains across the U.S. are fairly sustainable, some metropolitan areas where jumbo loan underwriting standards are considered relatively loose may be on the cusp of a potential bubble, according to Fitch Ratings. The San Francisco market, where home prices climbed to record levels in the third quarter of 2015, now looks like it did during the dot-com boom of the late 90’s, Fitch said. The firm’s recent RMBS Sustainable Home Price Report noted that homes in the Bay Area have climbed 62 percent above their post-recession low in early 2012 and are up 10 percent in the past year. At current levels, the Bay Area market is...

The expected increase in interest rates on some previously modified home mortgages is a slight credit negative for RMBS performance because these loans will re-default at a higher rate, according to analysts at Moody’s Investors Service. However, higher default rates will have only a modest effect on subprime and Alt A RMBS, because only a small percentage of outstanding subprime and Alt A mortgage loans are positioned to experience future rate step-ups. In their research, the analysts found that subprime and Alt A modified loans become delinquent more frequently after a rate step-up. “Modified subprime and Alt A loans with a demonstrated performance history of four to five years become delinquent at a significantly higher rate after a step-up in interest rates than do loans of a similar type and vintage that have not stepped up,” said the analysts in a new report released this week. According to their data, in July 2015, only 2 percent of the modified re-performing subprime loans became...

The Blackstone Group, according to industry sources, has amassed a war chest of roughly $250 million to buy non-agency, nonprime mortgages, another sign that “big money” investors have returned to the sector. At this point, it’s hard to say how much origination volume in the sector will grow. It’s well known that over the past 18 months, bond insurance giant PIMCO has been buying loans that don’t meet the qualified mortgage test from Citadel Servicing and others. The reason is ...

There was a hefty increase in mortgage originations for subprime borrowers with credit scores under 620, most of them FHA loans, according to Equifax. From January through October of 2015, some $50.7 billion of mortgages were originated for borrowers with credit scores below 620, the credit bureau said. That was up 28 percent from the same period in 2014. Equifax attributes this to smarter lending habits. Amy Crew Cutts, Equifax’s chief economist, said while there are many ...