New entrants in the Ginnie Mae issuer community expand access to credit at lower cost, deepen the market for Ginnie mortgage servicing rights and help address the agency’s “too-big-to-fail” issue, said the agency’s top executive. “Our top concern is that issuers have the operational and financial strength to meet issuer/servicer obligations,” Tozer said during the recent secondary market conference sponsored by the Mortgage Bankers Association. The flood of new nonbank issuers into the program has been well documented. While they have diluted the heavy concentration of business in the hands of a few megabanks, many have complex financial structures that are less tested in the marketplace, he said. The pipeline of issuer applicants has dropped dramatically, the Ginnie executive reported. To get approved, an applicant has to show where the cash will come from to ...

All three mortgage-production channels saw increased volume during the first quarter of 2015, but brokers made the most of the rising market, according to a new Inside Mortgage Finance ranking and analysis. Mortgage brokers produced an estimated $39.0 billion of home mortgages during the first three months of 2015, an increase of 14.7 percent over the fourth quarter. That pushed the broker share of originations to 10.8 percent, the sector’s highest market share since 2010. Retail production facilities did...[Includes five data tables]

Economists at the Federal Housing Finance Agency published a paper last week detailing a model that could be a better gauge of how low house prices can fall than models used before the financial crisis.“Leveraging a model based upon consumer and investor incentives, we are able to explain the depth of housing market downturns at both the national and state level over a variety of market environments,” the economists said. The economists noted that their model is dynamic, which is more useful than the static models used by the predecessor to the FHFA, which “proved insufficiently stressful in the lead up to the Great Recession.” A model based on a static shock can produce an insufficient level of stress ...

Seven months ago, a fledgling nonprime lender called Deephaven Mortgage unveiled a $300 million investment in the firm by a global “alternative” hedge fund called Varde Partners, Minneapolis. But since then, not much has been heard about Deephaven. Then again, it might be said that the “new” nonprime industry is still trying to figure out how to operate in a world of tight regulation, non-QM lending and a securitization market that doesn’t want to touch its product. Matt Nichols, the former Goldman Sachs managing director who formed Deephaven two years ago, did not respond...

In a ruling that may impact future fair-lending class actions, a federal district court judge in Manhattan has denied class certification in a lawsuit brought by the American Civil Liberties Union and National Consumer Law Center against global investment bank Morgan Stanley. Filed in October 2012, the suit was brought on behalf of African American borrowers in Detroit who obtained subprime loans from New Century Mortgage, a now-defunct originator that sold the loans to secondary-market purchasers, including Morgan Stanley, which then securitized them. New Century originated...

Interest rate volatility and other issues caused a reduction in jumbo-related profitability at some nonbanks in the first quarter of 2015. However, many nonbank conduits remain optimistic that the jumbo business will pay off, particularly via issuance of mortgage-backed securities. Redwood Trust reported $2.0 million in income from residential mortgage banking activities in the first quarter of 2015, down 80 percent from the previous quarter. The decline was primarily due to lower margins on ...

A sharp divide in the decline of nonprime mortgages held by the government-sponsored enterprises persists, according to a new analysis by Inside Nonconforming Markets. Holdings of nonprime mortgage-backed securities are down much more sharply at Fannie Mae and Freddie Mac than the GSEs’ holdings of purchased or guaranteed nonprime loans. Fannie and Freddie held a combined $50.78 billion in nonprime MBS as of the end of ... [Includes one data chart]

Impac Mortgage Holdings increased its originations of non-qualified mortgages in the first quarter of 2015. The nonbank had $11.3 million in originations of its AltQM products during the quarter, topping the $7.0 million in non-QM production Impac had in the second half of 2014. Underwriting standards for jumbo mortgages continued to loosen in April, according to the Mortgage Bankers Association. Underwriting for jumbos has loosened almost every month since ... [Includes three briefs]

Price reduction and improving economic factors helped push FHA volume up in the first quarter of 2015, according to an Inside FHA/VA Lending analysis of agency data. Production of forward single-family mortgages insured by FHA increased by 12.3 percent in the first quarter to $39.5 billion from $35.2 billion in the prior quarter, powered by a sharp uptick in refinances. FHA’s total refi business jumped from $2.29 billion in endorsements in February, a month of record snowstorms in the Northeast, to $8.15 billion in March. Total FHA forward-mortgage business rose by 83.8 percent from February, data showed. FHA streamline refis rose a whopping 144.1 percent quarter-over-quarter while conventional-to-FHA refis jumped 29.2 percent over the same period. Falling purchase loan volume, which was the reason for the overall decline in FHA originations last year, spilled over into ... [2 charts]

A unique stop-advance feature included in the jumbo MBS issued by Redwood Trust late last week was viewed favorably by investors, according to officials at the real estate investment trust. “We are pleased not only with the pricing execution on this transaction, but also with the level and depth of AAA investor interest,” Marty Hughes, Redwood’s CEO, said this week. The $356.45 million Sequoia Mortgage Trust 2015-2 included...