The Blackstone Group, according to industry sources, has amassed a war chest of roughly $250 million to buy non-agency, nonprime mortgages, another sign that “big money” investors have returned to the sector. At this point, it’s hard to say how much origination volume in the sector will grow. It’s well known that over the past 18 months, bond insurance giant PIMCO has been buying loans that don’t meet the qualified mortgage test from Citadel Servicing and others. The reason is ...

There was a hefty increase in mortgage originations for subprime borrowers with credit scores under 620, most of them FHA loans, according to Equifax. From January through October of 2015, some $50.7 billion of mortgages were originated for borrowers with credit scores below 620, the credit bureau said. That was up 28 percent from the same period in 2014. Equifax attributes this to smarter lending habits. Amy Crew Cutts, Equifax’s chief economist, said while there are many ...

Different factions of the mortgage industry are strongly urging the Consumer Financial Protection Bureau to place its yearend “clarifying letter” on TRID errors into the Federal Register, believing that it would provide stronger legal protection. According to interviews conducted by Inside Mortgage Finance, TRID errors – even minor ones – continue to be a chief reason why certain secondary market investors are rejecting mortgages, in particular non-agency product. The fear for these investors is assignee liability, that they could be sued for TRID errors even though they had nothing to do with the loan’s origination. One paragraph in the Dec. 29 letter from the CFPB to the Mortgage Bankers Association begins...

Clean-up calls were recently completed on three jumbo MBS issued by Redwood Trust in 2010 and 2011, marking the first such actions on post-crisis jumbo MBS. While MBS investors can take some losses when clean-up calls are completed, analysts suggest that’s not currently much of a concern for post-crisis jumbo MBS. Holders of clean-up call rights, typically servicers, have an option to purchase the remaining loans in an MBS when the outstanding balance of the deal falls below a certain threshold. Redwood completed...

Fitch Ratings will allow for differences in third-party due diligence practices when rating various types of residential MBS, granting concessions to risk-sharing transactions from the government-sponsored enterprises. The firm released revised master-rating criteria late last week. Among the changes compared with criteria that were released in October was an allowance for differences among non-agency MBS backed by recent originations, transactions related to the GSEs and non-agency MBS backed by seasoned loans. While most jumbo MBS issued in recent years have included third-party due diligence reviews of 100 percent of the loans in a deal, the GSEs’ much larger risk-sharing transactions have been...

The trickle of jumbo mortgage-backed securities issuance seen since July will continue as WinWater Home Mortgage prepares to issue a $407.95 million deal. DBRS and Moody’s Investors Service issued presale reports on the planned MBS this week. WinWater Mortgage Loan Trust 2016-1 will be backed by qualified mortgages from 68 lenders, led by Caliber Home Loans with an 11.6 percent share, Ditech Financial (10.0 percent) and LoanDepot (8.0 percent). The deal consists of two pools ...

Officials at Impac Mortgage Holdings said originations of non-qualified mortgages are a “primary focus” for the lender this year. Impac has been one of the most prominent non-QM lenders, but production remains relatively low. Impac originated $48.0 million in non-QMs in the third quarter of 2015, the most recent figures available. The lender refers to these originations as AltQM products. Impac focused its early non-QM efforts in the wholesale channel and started offering non-QMs via ...

Parkside Mortgage Trust recently started operations with plans to acquire non-agency mortgages, including non-qualified mortgages. The first loan acquired by the real estate investment trust was a jumbo QM. Officials at PMT said Parkside Lending, an affiliate of the REIT, will service the mortgages. “This effort has been in the works for the past three years and we’re proud that it has finally come to fruition,” said Matthew Ostrander, president and chairman of PMT. “We’re excited to be entering ...

Redwood Trust announced last week that it will discontinue acquiring and aggregating conforming mortgages for resale to the government-sponsored enterprises. Officials at the real estate investment trust stressed that Redwood’s jumbo operations will continue. Redwood started selling conforming mortgages to Fannie Mae and Freddie Mac in 2014, acquiring $4.0 billion in conforming loans during the year along with $5.0 billion in jumbos. Through three quarters in 2015, Redwood had ...

Bowing to pressure from investors – in particular, Carl Icahn – American International Group this week rolled out a blueprint to increase shareholder value, including a partial spin-off of its top-ranked mortgage insurance division, United Guaranty Corp. Although both AIG and UGC were not entertaining questions on the details, a spinoff of the MI business could come by mid-year with up to 19.9 percent of the unit being sold to the public. Eventually, AIG said...