Non-agency mortgage lending staged a minor revolt in 2013, reversing two years of increasing domination of the market by Fannie Mae, Freddie Mac and Ginnie Mae. The only growth spots in the mortgage market last year were in jumbo originations and home-equity lending, according to a new ranking and analysis by Inside Mortgage Finance. Jumbo production surged 20.9 percent from 2012 levels to an estimated $272 billion – the strongest output for the sector since 2007. Home-equity lending was...[Includes two data charts]

After two years of significant improvements, the total past-due rate for subprime mortgages has stalled since the first quarter of 2012. Special servicers continue to grow their subprime holdings in an effort to work out the poorly performing mortgages. The total past-due rate for subprime mortgages at the end of the fourth quarter of 2013 was 20.82 percent, according to the Mortgage Bankers Association, up from 20.14 percent in the previous quarter and from 20.30 percent in the fourth quarter of 2012. The past-due rate on subprime mortgages peaked in ... [Includes one data chart]

Officials at Redwood Trust, the leader in issuance of jumbo mortgage-backed securities since 2010, suggested this week that issuance of jumbo MBS from the firm this year likely won't hit the level seen in 2013. "Our preferred distribution for jumbo loans is securitization since we can retain attractive investments for our portfolio," Brett Nicholas, Redwood's president, said this week on a call with investors. "Today, however, whole-loan sales offer better execution." He said...

Redwood Trust's jumbo activity in 2014 will not match last year's production and overall mortgage originations may be down even more, so the real estate investment trust plans to put more emphasis on doing business with the government-sponsored enterprises and commercial mortgage activities. After seeing its jumbo acquisitions triple in 2013, hitting $6.9 billion, the REIT expects a downturn in 2014, but one that's less severe than the 32 percent decline projected for the industry ...

The wait for new disclosure requirements for non-agency mortgage-backed securities was extended this week as the Securities and Exchange Commission re-opened the comment period for the so-called Reg. AB2. The requirements for disclosures on new non-agency MBS and other asset-backed securities were first proposed in 2010. The SEC was set to approve a final Reg. AB2 rule earlier this month but is now reconsidering due to privacy issues. The delay comes as ...

HomeStreet Bank, a bit player in the jumbo mortgage-backed security market, wants a bigger role and has recently sought assessments from rating services and is working to expand its jumbo originations. Moody's Investors Service announced last week that HomeStreet received an "average" rating as an originator of jumbos. The Northwest bank also has jumbo MBS servicer ratings from Fitch Ratings and Moody's. Terri Silver, a vice president of investor relations and corporate communications ...

An increase in the purchase-mortgage share in new jumbo mortgage-backed securities will benefit investors in the deals, according to Moody's Investors Service. However, the loans are more difficult for lenders to originate than refinance mortgages, and it remains to be seen if investor demand will be high enough to prompt issuance of jumbo MBS. The share of refis in jumbo MBS declined as interest rates rose in 2013. Moody's said the trend is expected to continue this year and noted that ...

Titan Capital Solutions announced this week that it has 65 correspondent jumbo lending clients. The firm is a subsidiary of Titan Lenders and started accepting applications from jumbo correspondents in the first quarter of 2013. TCS said it offers mortgages with balances of up to $1.0 million and allows credit scores as low as 690 and loan-to-value ratios as high as 80 percent. Morgan Stanley has reached an agreement in principle with the Securities and Exchange Commission ... [Includes seven briefs]

Stakeholders continued to express concern over certain provisions in a draft model law that would be used as an overlay to, rather than a replacement of, existing state foreclosure laws. While many provisions of the current draft of the Home Foreclosure Procedures Act are right on track, several other provisions would raise the cost of lender compliance and make the origination and servicing of residential mortgages more difficult, warned stakeholders. “Sensible reform of the foreclosure process should not include...

So much has been said in recent days about a possible yet cautious return to subprime mortgage lending as lenders lowered their credit-score requirements for FHA mortgages and other agency loans with certain limitations. Industry participants, however, say today’s “subprime” is a misnomer and certainly not the same toxic subprime mortgage product that pushed the U.S. financial system to the brink of collapse. Lenders are more cautious in the post-subprime era and they no longer practice risk layering on loans to borrowers with less-than-stellar credit histories as they did in the past, industry observers say. “In the past, lenders combined risk layering with low credit scores,” said Brian Chappelle, a mortgage industry consultant. “Today, I would be shocked if any lender used Fannie Mae, Freddie Mac or the FHA as a vehicle for traditional subprime because they would be ignoring the possibility of repurchase or indemnification.” Lenders today are...