Angel Oak Capital Advisors issued a nonprime mortgage-backed security on Dec. 17 tied to loans with an unpaid principal balance of $150.35 million. It was the fourth – and largest – nonprime MBS issued in 2015. Angel Oak Mortgage Trust 2015-1 included a $120.28 million senior tranche, a $15.04 million mezzanine tranche and two subordinate tranches totaling $15.04 million. The deal was issued by Angel Oak’s Greenleaf Income Trust II and was not rated. Officials at Angel Oak said ...

Affordable housing advocates are calling for changes to the mortgage interest deduction allowed for federal taxes. Interest on up to $1.0 million in principal is currently deductible. The National Low Income Housing Coalition recently published a report supporting its call for the cap on the mortgage interest deduction to be lowered to loan balances of $500,000 and below. “There is no policy rationale for the federal government to continue to subsidize the portion of mortgages that ...

FHA lenders funded $12.3 billion in new Home Equity Conversion Mortgage loans during the first nine months of 2015, up a hefty 22.2 percent from the same period in the prior year, according to Inside FHA/VA Lending’s analysis of agency data. Likewise, HECM endorsements increased 17.3 percent to $4.5 billion in the third quarter from $3.9 billion in the prior quarter. This was the highest HECM endorsements have been since the second quarter of 2013, when they totaled $4.1 billion. Purchase loans accounted for 85.8 percent of all HECM originations over the nine-month period. The majority of borrowers favored adjustable-rate HECMs over fixed-rate HECMs, which accounted for only 14.8 percent of HECM transactions. In addition, the initial principal amount at loan originations totaled $7.3 billion, up from $4.6 billion midway through 2015. The volume increase is attributable to program changes implemented ... [1 chart]

Greenleaf Income Trust this week priced a $135 million non-agency, nonprime MBS, the largest such offering since the housing bust. It marks the second nonprime MBS sold in the past week, and the fourth deal of the year – all of them sold as private placements with no ratings. Mike Fierman, managing partner and CEO of Angel Oak Companies, which is affiliated with Greenleaf, told Inside MBS & ABS he’s pleased with the outcome of the security. “We had broad investor participation and the transaction was oversubscribed.” Fierman said...

The supply of home mortgage debt outstanding increased by 0.5 percent during the third quarter of 2015, following a similar modest gain during the previous period. A total of $9.952 trillion of single-family mortgage debt was outstanding at the end of September, according to a Federal Reserve report released late last week. It represented a second consecutive quarterly increase, something the mortgage servicing market has struggled to accomplish during the long contraction that started back in 2008. Most of the increase came...[Includes one data table]

Subservicing shops increased their portfolios to $1.50 trillion during the third quarter, a 6.4 percent sequential gain, as mortgage originators continued to rely on such specialty vendors, according to exclusive survey figures compiled by Inside Mortgage Finance. Compared to a year ago, subservicing volume was up an impressive 28.2 percent. At Sept. 30, roughly 15.8 percent of all outstanding residential mortgages were being processed...[Includes one data table]

Lenders generated $25.0 billion in home-equity loans during the third quarter of 2015, according to Inside Mortgage Finance estimates, a modest 4.2 percent increase at a time when first-lien originations were fading. Home-equity lending – including open-ended lines of credit and closed-end second liens – hit its highest volume since the second quarter of 2008. Crashing home prices and extremely cautious underwriting have drastically reduced new home-equity lending. There is...[Includes three data tables]

Originating nonprime mortgages can be done without repeating the mistakes that contributed to the financial crisis, according to officials at Angel Oak Mortgage Solutions. The firm, one of the most prominent lenders in a severely constrained market, launched in early 2014 and offers nonprime mortgages via wholesale and correspondent channels. Tom Hutchens, a senior vice president of sales and marketing at Angel Oak, said the lender is comfortable extending ...

The first jumbo mortgage-backed security from a subsidiary of Hatteras Financial received relatively strong reviews from rating services. The $231.18 million Onslow Bay Mortgage Loan Trust 2015-1 received AAA ratings with credit enhancement of 8.55 percent on the senior tranche. DBRS and Standard & Poor’s said that while they find Onslow Bay to be an acceptable aggregator, they increased the required credit enhancement on the MBS somewhat due to Hatteras’ lack of experience ...

Less than 1.0 percent of the dollar volume of jumbo mortgages originated in 2014 would have been eligible for sale to the government-sponsored enterprises based on higher GSE loan limits that are set to take effect next year in nine metro markets, according to an Inside Nonconforming Markets analysis of data from the Home Mortgage Disclosure Act. The Federal Housing Finance Agency recently announced that high-cost loan limits will increase in 39 counties next year, with limits ...