FHA jumbo originations took a 32.2 percent tumble during the first quarter of 2011 yet remained strong enough when combined with Fannie Mae and Freddie Mac’s jumbo numbers to beat non-agency jumbo originations for the quarter, according to a new Inside FHA Lending ranking and analysis. FHA, Fannie and Freddie accounted for $26.15 billion, or 15.7 percent, of all jumbo loans – those exceeding $417,000 – originated in the first quarter, compared to $25.0 billion in new non-agency jumbo loans produced during the same period, data from Inside Mortgage Finance show. During the first quarter, FHA jumbo production fell to... [Includes two data charts]

Ocwen’s pending purchase of Litton Loan Servicing’s $42.32 billion portfolio will make Ocwen the largest subprime servicer while also potentially increasing integration problems. Ocwen has faced some issues handling the $24.9 billion HomEq portfolio it acquired last year, and Litton’s business practices are substantially different from Ocwen’s. The combined Ocwen-Litton subprime portfolio is $96.42 billion as of the end of the first quarter of 2011, according to Inside Nonconforming Markets. If the transaction is completed as anticipated later this year, Ocwen will...

Serious delinquency rates on subprime mortgages improved in the first quarter of 2011 for a fifth consecutive quarter. However, analysts warn that the sector faces increased risks due to scrutiny from federal regulators and Congress. Meanwhile, subprime originations remain all but nonexistent, causing the amount of subprime mortgages outstanding to fall to an estimated $605.0 billion in the first quarter of 2011, according to Inside Nonconforming Markets. In 2005, an estimated $625.0 billion in subprime mortgages were originated, with another...[includes one data chart]

Stated-income lending, once a staple of the non-agency market, has not disappeared completely. A few portfolio lenders currently offer the loans, largely to wealthy borrowers looking for jumbo mortgages.In 2006, 54.6 percent of mortgages in non-agency mortgage-backed securities were originated based on alternative, stated or no documentation, according to the Inside Mortgage Finance MBS Database. The mortgages generally performed extremely poorly as borrower income was often overstated. However, private wealth lenders – including California-based...

Two Harbors Investment plans to issue a $250.0 million jumbo non-agency mortgage-backed security this year, with gradual increases in issuance planned in the coming years, officials at the real estate investment trust said last week. William Roth, a co-chief investment officer at Two Harbors, said there is tremendous opportunity to profit from non-agency MBS issuance – not so much in 2011, but in 2012 through 2014. “Our ability to generate loans to our guidelines and create credit pieces is a runway that could be extremely long,” he said at an investor conference hosted by...

The Federal Reserve’s continued sale of non-agency mortgage-backed securities from the $31.2 billion Maiden Lane II portfolio is decreasing prices on subprime MBS, according to industry analysts. Investors are being urged to buy vintage subprime MBS now as prices on the assets appear to be hitting bottom. Prices on subprime MBS have dropped by as much as 21.0 percent since mid-February, according to the ABX index. The bulk of the decline has occurred since early April, largely for 2006 and 2007 vintages. “There are some reasons to believe we are at or approaching the...

Wells Fargo, the biggest originator of Home Equity Conversion Mortgage loans, is exiting the reverse mortgage market after 20 years due to the unpredictability of property values. The departure of the San Francisco-based lender is another major blow to the wobbly HECM market already weakened by plummeting home prices. In February, Bank of America, the second largest HECM producer, announced it was quitting the reverse mortgage market to focus on other lines of business. The two institutions showed a combined ... [includes one data chart and one graph]

Ginnie Mae has raised the servicing fee compensation for its Home Equity Conversion Mortgage-Backed Securities (HMBS) program. Currently issuers receive either a flat 6-to-75 basis points monthly servicing fee or a 25-75 bps servicing fee based on a portion of the mortgage interest rate. Effective for HMBS with an issue date on or after July 1, 2011, issuers must select a servicing fee margin of at least 36 bps and not exceeding ...

Ocwen Financial Corp. is poised to significantly expand its mortgage servicing business with the acquisition of Litton Loan Servicing from Goldman Sachs Group for approximately $264 million. The sale price does not reflect certain assets that Goldman will retain, the investment bank said in a June 6 statement announcing the deal. The bank did not specify which assets would be excluded from the transaction. The planned sale will end...

Jumbo mortgage originations held up better than the overall market in early 2011, but more of the strength in the sector came from agency programs, according to a new Inside Mortgage Finance ranking and analysis. Mortgage lenders originated an estimated $51.2 billion of new loans that exceeded the bench-mark $417,000 conforming loan limit during the first quarter of 2011. That was down 7.8 percent from the fourth quarter of last year, a much better showing than the 35.0 percent downturn in total mortgage originations during the same period. In fact, loans exceeding $417,000 accounted for...[includes two data charts]