The non-agency mortgage-backed security market could be revived this year by economic factors rather than efforts by Congress or industry participants, according to analysts. The non-agency share of mortgage originations has been relatively strong in recent years, but the loans were largely held in bank portfolios instead of included in non-agency MBS. Legislative reform of the government-sponsored enterprises and potential incentives for non-agency MBS issuance look ...

Issuers of jumbo mortgage-backed securities stuck with plain vanilla mortgages in 2015, according to a new analysis by Inside Nonconforming Markets. Meanwhile, a wide variety of lenders contributed to jumbo MBS last year, with only one bank accounting for an outsized share of contributions. First Republic Bank was the top originator of jumbo mortgages that were securitized in 2015, accounting for nearly 20 percent of all jumbo MBS issuance ... [Includes two data charts]

The performance risks posed by a new breed of alternative-documentation mortgages are likely much lower than the mayhem caused by reduced-documentation mortgages originated before the financial crisis, according to Moody’s Investors Service. While most lenders verify the borrower’s income and assets used to qualify for mortgages, some non-agency lenders are willing to originate loans with less than full documentation. Lenders allowing for alt-doc underwriting typically ...

The most active issuer of jumbo mortgage-backed securities in 2015, based on the number of deals sold, is set to issue the first jumbo MBS of the year. Two Harbors Investment is preparing a $304.75 million deal, according to presale reports. A presale report from Standard & Poor’s on the deal on Jan. 4 ended a span of 31 days without a presale report for a new jumbo MBS. Fitch Ratings published a presale report on the same deal the following day. The deal will mark the first ...

Issuers of Ginnie Mae mortgage-backed securities pushed a record $435.80 billion of government-insured loans through the program during 2015, according to a new Inside FHA/VA Lending analysis and ranking. Last year’s total Ginnie MBS issuance topped the previous record of $429.50 billion issued during 2009. The $435.80 billion total for 2015 includes securitization of FHA home-equity conversion mortgages and other single-family loans guaranteed by FHA, the VA, and the Department of Agriculture rural housing program from Ginnie pool-level MBS data that are not truncated. Production in 2015 hit its high-water mark in the third quarter with $128.23 billion in issuance, and then fell 18.0 percent in the final three months of the year. Purchase mortgages continued to account for most Ginnie business in 2015, 58.0 percent of the agency’s forward-mortgage securitizations. But a huge factor in the ... [ Charts ]

The first rated securitization backed by nonperforming Home Equity Conversion Mortgage loans contains strong, credit-positive features that outweigh the credit risk associated with nonperforming loans, according to a Moody’s Investors Service analysis. The effect of some of these positive features on the performance of Nationstar HECM Loan Trust 2015-2, however, depends on whether Nationstar Mortgage remains as servicer for the transaction, said the rating agency. Nationstar has a servicer rating of B2/Stable from Moody’s and is also the transaction’s sponsor. Nationstar issued NHLT 2015-2 in November 2015 and by the end of December, the first remittance report showed strong initial performance. Credit enhancement to the Aaa (sf)-rated notes increased by 1.69 percent in the first month of operations, Moody’s noted. “As long as Nationstar continues to be the ...

Four nonprime MBS backed by newly-originated residential loans came to market during the last four months of 2015, but none of deals were rated, a situation that could change in the new year. In a recent interview with Inside MBS & ABS, John Hsu, head of capital markets for Angel Oak Capital, said his company hopes to get a rated deal done in 2016, believing such a milestone would help move the nascent market forward. “We need...

A strong first half of 2015 helped the issuance of jumbo mortgage-backed securities top the volume seen in 2014, according to a new analysis by Inside Nonconforming Markets. But as the year progressed, issuance slowed and industry analysts don’t expect much of an increase in volume in 2016. Some $12.08 billion in jumbo MBS were issued in 2015, up 25.4 percent compared with 2014 but not enough to match the $13.12 billion in 2013 issuance. And jumbo MBS activity ... [Includes one data chart]

Angel Oak Capital Advisors issued a nonprime mortgage-backed security on Dec. 17 tied to loans with an unpaid principal balance of $150.35 million. It was the fourth – and largest – nonprime MBS issued in 2015. Angel Oak Mortgage Trust 2015-1 included a $120.28 million senior tranche, a $15.04 million mezzanine tranche and two subordinate tranches totaling $15.04 million. The deal was issued by Angel Oak’s Greenleaf Income Trust II and was not rated. Officials at Angel Oak said ...

Affordable housing advocates are calling for changes to the mortgage interest deduction allowed for federal taxes. Interest on up to $1.0 million in principal is currently deductible. The National Low Income Housing Coalition recently published a report supporting its call for the cap on the mortgage interest deduction to be lowered to loan balances of $500,000 and below. “There is no policy rationale for the federal government to continue to subsidize the portion of mortgages that ...