The jumbo mortgage-backed security market was dormant for over two months, but within the past 14 days, Credit Suisse issued a $287.42 million deal and JPMorgan Chase started shopping a $356.39 million issuance. That’s not to say the jumbo MBS market is back to full strength. The two deals have some unique characteristics, and banks still maintain their dominance over nonbank aggregators of jumbos. Officials at American Capital Mortgage Investment said jumbo MBS issuance has plenty of potential ...

One of the biggest challenges for nonbanks that want to originate jumbos is finding capital to fund the operations. Two Harbors Investment appears to have found a unique source of capital for non-agency originations: a government-sponsored enterprise. In December, TH Insurance Holdings, a wholly owned subsidiary of Two Harbors, was granted membership in the Federal Home Loan Bank of Des Moines. Officials at Two Harbors said the company appears to be the first real estate investment trust to receive ...

Two real estate investment trusts with jumbo mortgage correspondent and conduit operations have scaled back their activity due to strong competition from banks. “The majority of today’s jumbo mortgage activity is being driven by banks originating or acquiring loans for their balance sheet,” said Stanford Kurland, chairman and CEO of PennyMac Mortgage Investment Trust. PennyMac had ramped up its jumbo activity in the second quarter of 2013 with $107 million in fundings. In the third quarter of 2013 ...

There are pockets in the jumbo market that offer lenders attractive yields, if they are willing to take on the risk of originating loans that don’t meet qualified-mortgage requirements, according to Matthew Ostrander, CEO of Parkside Lending. The lender recently launched Parkside Mortgage Trust, a real estate investment trust that will purchase non-agency loans originated by Parkside. “Parkside’s analytics of loan performance and product development has been many years in the making to ensure our ...

The Consumer Financial Protection Bureau is preparing to comply with a mandate from the Dodd-Frank Act and collect more data under the Home Mortgage Disclosure Act. Among the additional HMDA data requirements under consideration are whether a mortgage meets qualified-mortgage standards, debt-to-income ratios, the length of introductory interest rates and more underwriting and pricing information. “Improving the kinds of information collected would make it easier to identify new consumer ... [Includes four briefs]

Buoyed by improvement in FHA loan quality, some lenders have begun lowering the credit score requirements for FHA and other government-backed mortgages. Last month, Wells Fargo alerted FHA lenders of its decision to lower the minimum credit score for purchase home loans through its retail channel from 640 to 600. “We felt it was an appropriate time to do it given the improvement in FHA loan quality,” a spokesman explained. “The change applies to all FHA borrowers. Last year’s resolution of the FHA indemnification issue also prompted the change at Wells Fargo, according to a bank official. In addition, resolving the putback risk with ...

Credit Suisse late last week broke a two-month lull in jumbo MBS issuance, and JPMorgan Chase appears to be planning a new security. However, the jumbo MBS market is far from flourishing as other issuers continue to avoid the sector. Credit Suisse issued a $287.42 million jumbo MBS last week. CSMC Trust 2014-IVR1 received a AAA rating from DBRS with credit enhancement of 6.85 percent on the top-rated tranche. The deal had...

Interest shortfalls in the residential MBS space continued to drift higher across different collateral types, tranche types and vintages throughout 2013, according to Morningstar Credit Ratings. “As of the December 2013 remittance cycle, nearly one out of five deals (19.1 percent) in our sample experienced a shortfall in at least one tranche,” Morningstar said in a recent report. Interest shortfalls take place...

Investors hoping to cash in on some of the huge returns realized by speculators in legacy nonprime MBS likely have missed the boat. Moreover, principal reductions on the remaining underlying loans are now deemed a credit negative. Trading in on vintage non-agency securities has been light of late. According to a recent report from Bank of America Merrill Lynch, the rally in such securities “has reached the ninth inning.” BAML notes...

Wall Street generated $165.66 billion of new non-mortgage ABS during 2013, a sturdy 12.7 percent increase over the previous year and the best annual production volume since 2008, according to a new analysis and ranking by Inside MBS & ABS. ABS issuance fell off in the fourth quarter of 2013, dropping 10.4 percent from the third quarter, as all the major asset classes saw slowing volume. The $37.82 billion of new ABS generated in the final three months of 2013 was slightly below the second quarter, but it was above the level set in the third and fourth quarters of 2012. Vehicle-finance ABS turned in...[Includes two data charts]