Originations of non-agency jumbo mortgages through two quarters in 2012 were 35.8 percent above the pace set in 2011, according to affiliated publication Inside Mortgage Finance. Almost all of the major jumbo lenders are increasing production and the vast majority of originations continue to be held in portfolio. An estimated $37.0 billion in non-agency jumbos were originated during the second quarter of 2012, up 5.7 percent from the previous quarter and up 60.9 percent from the ... [Includes one data chart]

Redwood Trust is set to issue its fourth non-agency jumbo mortgage-backed security of the year, according to presale reports released this week. The $313.22 million non-agency jumbo MBS includes only slight changes to improve on securities previously issued by the real estate investment trust. Sequoia Mortgage Trust 2012-4 is set to receive triple-A ratings from Fitch Ratings, Kroll Bond Rating Agency and Moody’s Investors Service, with 7.30 percent credit enhancement on the highest-rated ... [Includes one data chart]

The government-sponsored enterprises’ guaranty fees will increase by an average of 10 basis points in the coming months as the Federal Housing Finance Agency works to align agency pricing with the private market. An increase earlier this year brought interest rates on agency mortgages slightly closer to the rates on non-agency jumbo mortgages but industry analysts suggest that the conforming loan limits have a greater impact on the market share for non-agency originations. “These increases will move [GSE] pricing ...

After years of holding off, Homeward Residential last week launched a principal forgiveness program for proprietary loan modifications. The program follows a settlement with the Massachusetts attorney general and success with principal reduction by other nonprime servicers. “We view this program as an additional safety net for borrowers who have limited options,” said Javid Jaberi, an executive vice president of servicing operations at Homeward Residential, formerly known as American Home Mortgage Servicing ...

A California-based lender that had a $400,000 minimum loan amount policy agreed to a settlement with the Department of Justice this week regarding alleged discrimination. Luther Burbank Savings will spend $2.0 million as part of the settlement and is prohibited from implementing a $400,000 minimum loan amount policy. The lender denied the discrimination allegations, did not admit any wrongdoing as part of the settlement and claimed the loan amount policy was tied to its focus on nontraditional mortgages ...

Performance of jumbo mortgages originated before 2005 is declining, bucking a trend among non-agency mortgages, according to Fitch Ratings. Most of the remaining pre-2005 jumbo borrowers have been unable to refinance. “Many high-quality mortgage borrowers are refinancing to take advantage of record-low interest rates, leaving the remaining mortgage pools increasingly concentrated with borrowers unable to refinance,” said Grant Bailey, a managing director at Fitch. More than 93.0 percent of the roughly ...

The reverse mortgage industry is at odds with consumer advocates and the Consumer Finance Protection Bureau over a recent CFPB study, which claimed that consumers find reverse mortgages too complex and difficult to understand and that the risk of fraud and other scams persist. The latest dispute flared as reverse mortgage lenders and consumer groups responded to the CFPB’s request for information on abusive financial practices that affect elderly Americans. The comment period ended on Aug. 31. To assist its ongoing study of reverse mortgage transactions, the CFPB in July sought ...

Fannie Mae and Freddie Mac both saw substantial declines in deliveries of home mortgages with balances exceeding $417,000 during the second quarter, offsetting a significant increase in FHA originations of conforming jumbo loans. Combined, the three agencies did $24.1 billion in conforming jumbo mortgage business – loans on single-unit properties in the lower 48 states that exceed the old $417,000 loan limit. That was down 16.3 percent from the first three months of 2012 at a time when overall mortgage origination volume fell 5.2 percent. Meanwhile, originations of non-agency jumbo loans rose...[Includes two data charts]

The Federal Housing Finance Agency’s streamlined short sale guidelines set to kick in Nov. 1 could increase losses on certain home-equity loans and second liens held in bank portfolios, according to a recent analysis by Fitch Ratings. Under the new guidelines, which were announced last month, servicers will be able to accelerate their processing of a short sale for borrowers with eligible hardships without any additional approval from either of the government-sponsored enterprises. This will ...

Despite increased activity in the Fannie Mae and Freddie Mac refinance programs for underwater borrowers during the second quarter of 2012, total refi originations declined by 4.8 percent from the first three months of the year, according to a new Inside Mortgage Finance analysis and ranking. Refinance activity still accounted for 68.1 percent of originations during the most recent quarter, but that was down from 75.3 percent in the first three months of the year. Partly offsetting the drop in refi business was a 35.8 percent increase in purchase-mortgage originations, which rose to an estimated $129.0 billion in the second quarter. But compared to the first half of 2011, purchase-mortgage lending was down 1.3 percent as of the midway point this year. Refinance originations appear to be climbing in the third quarter. Data on Fannie and Freddie securitization activity in July and August suggest that total refi business at the government-sponsored enterprises is...[Includes four data charts]