Non-agency jumbo mortgage originations accounted for a historically high 19.4 percent of new lending during the first half of 2014, and the sector is steadily gaining ground, according to a new Inside Mortgage Finance analysis of big-ticket mortgage activity. During the second quarter of 2014, lenders originated an estimated $59.0 billion of mortgage loans that were too big to be financed through Fannie Mae, Freddie Mac or the FHA. That was up 34.1 percent from the first quarter, a noticeably bigger increase than the 25.5 percent jump in total mortgage originations for the period. Compared to last year, jumbo lending was...[Includes three data charts]

Production of conventional mortgages – those eligible for sale to Fannie Mae and Freddie Mac as well as jumbo loans – grew at a faster rate than the government-insured market during the second quarter of 2014, according to a new Inside Mortgage Finance analysis. Origination of conventional-conforming mortgages increased by 24.4 percent from the first quarter, climbing to an estimated $153.0 billion. While that continued to account for the biggest chunk of new business – 52.1 percent – the biggest proportional increase in new lending came in the jumbo mortgage sector, where new originations jumped 34.1 percent during the second quarter. Production of government-insured mortgages, including FHA, VA and rural housing loans, increased...[Includes two data charts]

The level of warehouse commitments rose 9.6 percent on a sequential basis in the second quarter as originations increased in the primary market, according to figures compiled by Inside MortgageFinance. Overall, commitments edged up to an estimated $30.0 billion across the industry. But compared to the same period a year ago, commitments fell a bloodcurdling 26.8 percent, reflecting the downdraft in the overall origination market over the past 12 months. According to interviews conducted by Inside Mortgage Finance over the past few weeks, usage rates improved...[Includes one data chart]

Originations of jumbo mortgages increased significantly in the second quarter of 2014 compared with the previous quarter, according to a new ranking and analysis by affiliated publication Inside Mortgage Finance. An estimated $59.0 billion in non-agency jumbos were originated in the second quarter, up 34.1 percent from the previous quarter and reversing two consecutive quarters of declining originations for the jumbo sector. Halfway through the year, jumbo production ... [Includes one data chart]

A number of real estate investment trusts are increasing their presence in the jumbo mortgage-backed security market with conduit programs as well as purchases of subordinate tranches from new MBS. Two Harbors Investment said its jumbo conduit had a pipeline with an unpaid principal balance of $650 million at the end of the second quarter of 2014, more than four times the REIT’s pipeline at March 31. Two Harbors recently issued a $267.67 million jumbo MBS, the first from the REIT this year ...

Lowering the government-sponsored enterprises’ loan limits is one of the main goals for firms involved in the non-agency market but the effort lacks broad support in the mortgage industry, let alone in Congress. Among those submitting comments to the Treasury Department this month regarding how to increase non-agency activity, the American Bankers Association was one of the biggest supporters of decreased loan limits for the GSEs. The conforming loan limit is at $417,000 and ...

Goldman Sachs agreed to a settlement with the Federal Housing Finance Agency last week to resolve claims about non-agency mortgage-backed securities purchased by Fannie Mae and Freddie Mac before the financial crisis. The FHFA said the settlement will cost Goldman $1.20 billion and the firm will buyback non-agency MBS from the government-sponsored enterprises. The original balance of the securities owned by Fannie and Freddie that Goldman will buyback is ... [Includes five briefs]

Roughly $1 billion in damages will flow through to the FHA and Ginnie Mae from Bank of America’s record $16.65 billion global mortgage-backed securities settlement with the Department of Justice. Although most of the DOJ’s case centered around faulty private-label MBS that BofA and its forbears (namely Countrywide and Merrill Lynch) underwrote during the housing boom, a small piece of the settlement is tied to servicing chores that the bank did for Ginnie Mae. And apparently, BofA didn’t do a very good job of servicing the underlying product. The bank took over as the subservicer on roughly $26.2 billion in mortgage servicing rights that once belonged to Taylor, Bean & Whitaker, a large nonbank based in Ocala, FL. When TBW went bust in the second half of 2009, BofA was given the subservicing contract. “BofA serviced the loans for us,” said Ginnie Mae president Ted Tozer. “And they did a ...

The gradual slowdown in agency MBS purchases by the Federal Reserve helped real estate investment trusts grow their MBS portfolios during the second quarter of 2014. A new Inside MBS & ABS analysis of REIT earnings reports found that the industry held $286.3 billion of MBS as of the end of June. That was up 9.7 percent from the previous quarter and marked the first increase in REIT MBS holdings since the third quarter of 2012, when the aggregate industry portfolio was $374.2 billion. At the top of the sector, Annaly Capital Management reported...

The Department of Justice recently subpoenaed GM Financial and Santander Consumer USA, two of the largest subprime auto ABS issuers in the U.S., over concerns about their subprime auto lending and securitization operations, the two companies recently revealed. The developments suggest that such regulatory scrutiny of the sector in the wake of the financial crisis is intensifying, market participants and policy analysts say. Whether that will pose a substantial risk to other lenders remains to be seen. GM Financial announced...