The jumbo MBS market sprung to life this month, just before the close of the second quarter. Three firms are scheduled to issue jumbo MBS at the end of this week, and the market’s biggest player, Redwood Trust, is close to its first new issuance since pricing a deal at the end of March. While jumbo mortgage securitization is currently attractive to issuers, industry analysts suggest that volume will remain limited this year due to a number of factors, including a lack of strong demand from a wide range of investors, incentives for banks to hold jumbos in portfolio and continued dominance by the government-sponsored enterprises. “I think issuance will remain...

Over the past few months, at least $407 million of re-performing residential mortgages have been auctioned off in the secondary market, according to a recent tally from Mountain View Capital Group, Denver. As for how many of these loans will wind up in an MBS, that’s a different matter. DBRS has rated what it calls 15 “seasoned” loan programs since 2009, only four of which it considers to be re-performing. But according to DBRS Managing Director of Structured Finance Quincy Tang, “There’s certainly no shortage of re-performing collateral in the market.” In other words, despite the improvement in the housing market, there are...

About $179.6 billion of newly-originated home mortgages were securitized during the first quarter of 2014, resulting in a securitization rate of 76.4 percent, according to a new Inside MBS & ABS market analysis. The securitization rate was down slightly from 78.5 percent for all of last year and 78.8 percent during the fourth quarter. Historically, the rate peaked in 2009, when 84.4 percent of new originations were securitized. In the conventional conforming market, Fannie Mae and Freddie Mac securitization volume ($126.4 billion) actually exceeded...[Includes one data chart]

Even though the risk-sharing targets set for Fannie Mae and Freddie Mac have been all but met this year, expect the two government-sponsored enterprises to come to market with risk-sharing transactions at least once a quarter, with the likely result of both firms exceeding the 2014 target “by at least” $20 billion, predicted an analysis by Wells Fargo Securities. The FHFA’s 2014 Conservatorship Scorecard directs the GSEs to reduce taxpayers’ risks by increasing the role of private capital in the market via several strategies, including tripling the credit risk transfer goals to $90 billion in 2014 from $30 billion in 2013. Year-to-date, Fannie Mae’s Connecticut Avenue Securities program has already achieved...

Commercial banks and thrifts held $172.6 billion of non-mortgage ABS as of the end of the first quarter, a 10.2 percent drop from December 2013, according to a new Inside MBS & ABS analysis of call report data. The industry’s top ABS investor, TD Bank, increased...[Includes one data chart]

Redwood Trust late last week struck a deal with the Federal Home Loan Bank of Chicago to purchase fixed-rate jumbo mortgages from FHLBank members participating in the Mortgage Partnership Finance Program. Redwood will be the sole investor in “high balance” mortgages from the new MPF Direct program for three years. The program is subject to final approval from the Federal Housing Finance Agency. Officials at Redwood said the real estate investment trust plans to start investing in MPF Direct loans during the second half of this year. The loan limit for the MPF Direct program is...

Six months ago, AmeriHome Mortgage of California was a little known subsidiary of Impac Mortgage Holdings. But not anymore. Now controlled by Athene Holding Ltd., an insurance company owned by Wall Street veteran Leon Black, the nonbank lender is gearing up to make a splash in the jumbo and non-agency market as a correspondent buyer of mortgages. “They’re...

Major post-crisis changes in the mortgage market should boost new issuance of residential MBS and have a long-lasting, positive impact on credit, according to Moody’s Investors Service. The rating service cites three key developments that will continue to support a strong credit environment for new MBS issuance, starting with the final rule on ability to repay and qualified mortgages. Moody’s believes the rule will help MBS performance by improving the reliability and accuracy of data lenders use to underwrite loans. Under the ATR rules, lenders are required...

Several top-tier commercial banks increased their holdings of first-lien mortgages during the first quarter of 2014, according to a new ranking and analysis by Inside Nonconforming Markets. The growing portfolios were largely due to jumbo mortgages along with some conforming loans. Banks and thrifts held $1.74 trillion in first-lien mortgages in portfolio at the end of the first quarter of 2014, down 0.7 percent from the previous quarter ... [Includes one data chart]

WinWater Home Mortgage, a relatively new jumbo conduit, is preparing to issue a $249.47 million jumbo mortgage-backed security. The deal is set to receive AAA ratings from DBRS, Kroll Bond Rating Agency and Standard & Poor’s despite concerns about the lack of performance data for WinWater and the firm’s “limited financial capacity.” WinWater is partly owned by principals of Premium Point Investments, a residential mortgage investment advisor ...