Three separate issuers of jumbo MBS shopped deals in the past week, giving a jolt to a market that has been somewhat subdued since the end of the first quarter. Industry analysts suggest that while liquidity for new jumbo MBS remains limited, the deals can be a good investment. Redwood Trust is set to issue a somewhat unusual $337.08 million jumbo MBS, Credit Suisse is preparing a deal and Five Oaks Investment issued a $251.27 million security this week, according to rating reports and filings with the Securities and Exchange Commission. At the end of October, Two Harbors Investment issued...

It would take a significant increase in interest rates to diminish bank demand for holding originations of jumbo mortgages in portfolio, according to industry analysts. Analysts at Bank of America Merrill Lynch said higher interest rates could eventually shift the economics in favor of banks securitizing their jumbo production and buying back the AAA tranches of the mortgage-backed securities rather than owning the whole loans on their balance sheet. “While it is tough to ...

The third quarter of 2015 marked one of the few periods in recent years when Redwood Trust didn’t sell a jumbo mortgage-backed security. Instead, the real estate investment trust focused its jumbo sales efforts on the whole-loan channel, a trend expected to continue into 2016, according to officials at Redwood. “A strong portfolio bid for home loans from banks currently results in a more favorable loan-sale execution for us versus securitization,” Brett Nicholas, Redwood’s president ...

Issuance of jumbo mortgage-backed securities started to pick up speed in November after a slow start to the fourth quarter of 2015. Redwood Trust plans to issue a $337.08 million jumbo MBS with a number of unique characteristics, according to presale reports. Sequoia Mortgage Trust 2015-4 will be backed by 15-year fixed-rate mortgages, 75.5 percent of which were originated by UBS Bank. Kroll Bond Rating Agency noted that this will be the first post-crisis deal to include ...

The Federal Housing Finance Agency probably won’t increase the baseline conforming loan limit in 2016, according to industry analysts. The baseline conforming loan limit of $417,000 hasn’t increased since 2006 as home prices declined significantly shortly thereafter. The FHFA will use its seasonally-adjusted “expanded data” house-price index to set loan limits for the government-sponsored enterprises in 2016. The loan limits are expected to be published ...

Originations of nonprime loans that don’t meet standards for qualified mortgages are beginning to ramp up while still accounting for a small share of total origination volume. Impac Mortgage Holdings, one of the most prominent originators of non-QMs, has posted sharp growth since starting to offer the loans in the third quarter of 2014. Impac originated $48.0 million in non-QMs in the third quarter of 2015, more than double the $22.3 million in non-QM originations the lender had ...

Ocwen Financial continues to work toward satisfying regulatory requirements that would allow the nonbank to resume acquisitions of mortgage servicing rights. However, officials stress that MSR acquisitions aren’t the main focus for the company. “Right now, I don’t see in the marketplace a lot of opportunities for the kind of servicing transfers that would interest Ocwen and that’s why we’re focusing more of our efforts on generating new assets ... [Includes one data chart]

The nonprime mortgages held by the government-sponsored enterprises continued a steady decline in the third quarter of 2015, according to a new analysis by Inside Nonconforming Markets. Fannie Mae and Freddie Mac held a combined $153.22 billion in purchased/guaranteed nonprime mortgages as of the end of the third quarter of 2015, according to estimates by Inside Nonconforming Markets. The holdings declined by 3.7 percent ... [Includes one data chart]

First Republic Bank has contributed at least 21.3 percent of the loans that have been included in jumbo mortgage-backed securities issued in the first nine months of this year, according to a new ranking and analysis by Inside Nonconforming Markets. The bank was identified as having contributed $2.18 billion into jumbo MBS issued in the first three quarters of 2015, including $619.19 million in the third quarter. First Republic’s contributions to jumbo MBS issued in the third quarter alone topped the contributions of any other lender in the first nine months of the year. Jumbo MBS issuers and rating services generally disclose...[Includes two data tables]

In late December, issuers of new non-agency MBS will become subject to new risk-retention requirements. It’s not clear whether anyone will notice. The vast majority of loans securitized in jumbo MBS over the past few years meet the qualified-mortgage standard. And because federal regulators opted to synchronize the QM standard with the separate qualified residential-mortgage standard, jumbo MBS backed entirely by QMs will be exempt from the 5 percent risk-retention requirement. When the final rule came out, Redwood Trust backed...