Securitization rates for newly originated home mortgages remained at historically low levels during the first quarter of 2015, according to a new Inside MBS & ABS market analysis. The ratio of new MBS issuance to primary-market mortgage originations was just 71.6 percent during the first quarter. That’s down from 75.4 percent for all of last year and the record high of 88.8 percent back in 2009. The slowdown in securitization rates is...[Includes one data table]

Beginning June 15, rating services involved in MBS and ABS will be subject to increased disclosure standards from the Securities and Exchange Commission. Rating services expect to make a number of changes to comply with the final rule that was issued last August, with some concerns about the usefulness of the increased disclosures. The SEC is requiring nationally recognized statistical rating organizations to disclose rating histories, make changes to rating methodologies and disclose details on findings by third-party due diligence providers, among other issues. Moody’s Investors Service noted...

Angel Oak Mortgage Solutions was hoping to make a big splash this year by being the first lender to securitize newly originated nonprime mortgages since the housing bust. It now appears those plans are on hold. According to officials who said they have been briefed on the situation, the Atlanta-based Angel Oak is now shopping around a roughly $100 million package of nonprime loans, many of which were originated over the past year. One investor said...

Originations of jumbo mortgages along with retention of some conforming loans helped bank and thrift holdings of first liens grow in the first quarter of 2015, according to a new ranking and analysis by Inside Nonconforming Markets. Banks and thrifts held $1.78 trillion in first liens in portfolio at the end of the quarter, up 0.9 percent compared with the fourth quarter of 2014 and a 2.4 percent increase compared with the first quarter of last year. The portfolios ... [Includes one data chart]

While issuance of jumbo mortgage-backed securities is the strongest it’s been in the aftermath of the financial crisis, industry analysts suggest that it will be years before activity in the non-agency MBS market returns to levels anywhere near what was seen before the financial crisis. “The short-term outlook remains dismal,” said Quincy Tang, a managing director and head of U.S. residential MBS at DBRS. The factors that have limited issuance ...

Lenders offering nonprime loans that do not meet the qualified-mortgage standard have run into difficulties generating volume because weak secondary-market demand has made pricing on the loans unattractive to borrowers. Jeff Lemieux, until recently a vice president at Bayview Asset Management, said volume in nonprime non-QMs is extremely weak across the industry. “The consumer is resistant to the pricing,” he said. Lemieux said credit-impaired borrowers feel that ...

Redwood Trust can now acquire jumbo mortgages of up to $1.5 million from members of the Federal Home Loan Banks under the Mortgage Partnership Finance Direct program. That’s more than double the previous limit – $729,750 – and will significantly expand the pool of potential mortgages that Redwood will acquire. Previously, MPF Direct targeted the narrow range of loans with balances between $625,500, which is the current high-cost conforming loan limit, and ...

DBRS and Standard & Poor’s separately issued revised criteria for rating non-agency mortgage-backed securities in recent weeks. DBRS will give slightly more credit to jumbo MBS due to strong performance in recent years, while S&P adjusted modeling relating to home price trends. DBRS noted that from 2010 through the end of April, $32.1 billion in jumbo MBS had been issued, with only one deal taking any losses to date, a 0.04 percent loss. “Positive loan attributes ...

The Supreme Court last week issued a ruling that favors second-lien holders in cases involving negative equity and Chapter 7 bankruptcy. Industry analysts caution that Supreme Court justices look eager to rule differently if a similar case reaches the court. The cases considered were Bank of America v. Caulkett and Bank of America v. Toledo-Cardona. In both cases, borrowers in a negative equity position on their second liens sought to void the second liens ...

Total originations of reverse mortgages with FHA insurance increased in the first three months of 2015, according to an Inside FHA/VA Lending analysis of agency data. Home Equity Conversion Mortgage production, overall, rose 3.0 percent to $3.9 billion from the fourth quarter of 2014 and was down 2.0 percent on a year-over-year basis. HECM purchase loans far outpaced refinances, which accounted for only 14.5 percent of total HECM volume in the first quarter. Lenders reported a total of $2.3 billion in initial HECM principal amount at loan origination. Meanwhile, there is continued investor interest in HECM mortgage-backed securities (HMBS), according to Ginnie Mae. The unpaid principal balance of HMBS climbed to $48.9 billion in FY 2014 and the number of participations (the funded portions of HECM loans that have been securitized) has increased to 6,585, 856. HMBS issuance was ... [1 chart]