Originations of adjustable-rate mortgages increased by 25.0 percent on a quarterly basis in the second quarter of 2018, according to a new ranking and analysis by Inside Nonconforming Markets. An estimated $55.0 billion of ARMs were originated in the second quarter. The increase looks to be tied to seasonal factors and trends in interest rates. Through the first half of 2018, an estimated $99.0 billion of ARMs were originated, down 2.0 percent from ... [Includes one data chart]

Originations of government-insured mortgages rose 11.2 percent from the first to the second quarter of 2018, according to Inside Mortgage Finance estimates. That increase was slightly lower than the 17.1 percent gain in total first-lien originations over that period. The big winner for the second quarter was the jumbo sector, where loan volume surged 33.5 percent from the first three months of the year. On a year-to-date basis, government lending was down 12.6 percent from the first half of 2017. This reflects the steep decline in refinance lending in general, which affected FHA/VA production significantly. Jumbo lending was also down, by 6.6 percent, from the first six months of last year, but the conventional-conforming market saw a 4.2 percent gain at the midway point in 2018. FHA/VA loans accounted for 22.8 percent of first-lien originations in the first half of 2018. The government share for all of last year was ... [Chart]

Improved loan-sale execution in the non-agency market has taken a bite out of the conforming-jumbo business at Fannie Mae and Freddie Mac, a new Inside Mortgage Finance analysis reveals. [Includes three data charts.]

Home-equity lending accelerated in the second quarter of 2018, although the outstanding supply of home-equity lines of credit and closed-end seconds continued on its years-long downward trajectory, a new Inside Mortgage Finance analysis reveals. [Includes three data charts.]

With intense competition for originations of jumbo mortgages, the correspondent channel is experiencing volatility, according to an analysis by Inside Nonconforming Markets. A survey of major players in the market shows correspondent production of jumbo loans rose sharply from the first to the second quarter, though volumes and market share are down on an annual basis. Among a group of lenders that generated $55.77 billion in jumbo originations in the second quarter ... [Includes one data chart]

The amount of jumbo mortgages being handled by major servicers has largely increased in the past year, according to a new ranking and analysis by Inside Nonconforming Markets. Among a group of 30 servicers, only six posted declines in jumbo servicing volume on an annual basis as of the end of June. Among the top 10 jumbo servicers, only Ocwen Financial had a decline in servicing. The company remains under growth constraints placed by regulators ... [Includes one data chart]

Redwood Trust is looking to acquire more jumbo mortgages and many of the nonbanks the firm works with could use some financing, making Redwood’s new funding initiative a good match. During the second quarter of 2018, Redwood deployed $40.0 million in customized financing for nonbanks that deliver jumbos to the real estate investment trust. The initiative is part of a diversification effort. Dashiell Robinson, president of Redwood, noted that the REIT isn’t acting as a ...

Flagstar Bank looks to have found an agreeable due diligence sampling rate for loans in its prime non-agency mortgage-backed securities. The company is preparing to issue a $476.1 million prime non-agency MBS, according to presale reports published last week. It’s the second issuance in a row from Flagstar where 30.0 percent of the loans were subject to third-party reviews. Only 20.0 percent of the loans in a $704.1 million deal Flagstar issued in April were subject to ...

Rating services are divided on whether the income documentation used by Caliber Home Loans qualifies as full documentation. The differences are apparent in a pending $342.6 million issuance from Lone Star Funds, which is stocked with mortgages from Caliber. According to Fitch Ratings, Lone Star is the only current issuer of nonprime MBS to keep mortgages with nontraditional income-documentation out of its deals. The rating service said 99.4 percent of the dollar volume of the loans ...

Nonprime mortgages are performing better than expected and prepayment rates remain elevated, according to industry analysts. Fitch Ratings noted that 60+ day delinquency rates on nonprime mortgages in post-crisis mortgage-backed securities rated by the firm were less than 4.00 percent as of August. “The performance of Fitch-rated nonprime transactions has outperformed initial projections,” the rating service said. The average conditional prepayment rate ... [Includes one data chart]