The subprime servicing sector is a shell of its former self, with the dollar volume of loans outstanding declining by 75.8 percent in the past nine years, according to a new ranking and analysis by Inside Nonconforming Markets. Loans originated during the subprime boom continue to pay off or go through foreclosure while new originations have been few and far between. An estimated $300.0 billion in subprime servicing was ... [Includes one data chart]

Many issuers of jumbo mortgage-backed securities appear to have pulled back from the market due to weak demand from investors. Thus far in 2016, only two jumbo MBS have been issued. At the same point in 2015, eight jumbo deals had been issued. Hatteras Financial issued its first jumbo MBS in December. Last week, officials said the real estate investment trust will reduce its capital allocation to jumbo securitization business this year. “Until the yield curve steepens and ...

Holdings of subprime and Alt A mortgages by Fannie Mae and Freddie Mac continue to decline, though there’s a sharp divergence in terms of the government-sponsored enterprises’ guarantees of nonprime loans and mortgage-backed securities. The GSEs were exposed to a combined $147.34 billion in purchased/guaranteed nonprime mortgages as of the end of 2015, according to an analysis by Inside Nonconforming Markets ... [Includes one data chart]

An appeals court in Massachusetts recently ruled in favor of a borrower in a case involving the determination of the borrower’s ability to repay a balloon mortgage, setting a concerning precedent, according to industry lawyers. Moronta v. Nationstar Mortgage involves a refinance originated by Fremont Investment & Loan in January 2007 for a borrower in Quincy, MA. The refi included a first-lien 3/1 adjustable-rate mortgage that amortized over 50 years with a ...

FHA lenders are anticipating long-awaited guidance from the Department of Housing and Urban Development implementing sweeping changes related to reverse-mortgage borrowers in default for not paying their taxes and insurance. But don’t be surprised if HUD issues additional guidance before the implementation date, said James Wright, an attorney with Bradley Arant Boult Cummings’ Birmingham office. First announced in April 2015, the guidance sets...

Carol Galante, former head of the FHA, has been named to Ocwen Financial’s board of directors. Galante left the FHA in August 2014 to take on the position of faculty director with the Terner Center for Housing Innovation at the University of California, Berkeley. Current director Phyllis Caldwell was elevated...

Originations of home-equity lines-of-credit are increasing along with the average size of the loans at origination. The expansion has occurred without a significant loosening of underwriting standards as combined loan-to-value ratios and other underwriting metrics for HELOCs remain much tighter in the current market compared with pre-2008 originations. An estimated $68.5 billion in home-equity loans were originated in the first three quarters of 2015, according to Inside Mortgage Finance, up 25 percent compared with the same span in 2014. The originations have been helped by increases to home prices and an improving job market. According to CoreLogic, the average size of HELOCs originated in the first three quarters of 2015 (measuring the line’s limit at origination) was...

Investors in the secondary market are continuing to shy away from mortgages with so-called TRID errors – even minor ones – taking the advice of legal counsel and due diligence providers who are telling them to stay clear because of assignee liability issues. Late last week, senior executives from the Structured Finance Industry Group traveled to Washington to meet CFPB Director Richard Cordray, but one official familiar with the get-together said the regulator conveyed a message of “Thanks for coming in, but we don’t think there’s a problem.” For now, most of the concern about a stalled secondary market has focused...

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 ...