JPMorgan Chase Bank has created a synthetic credit-linked note to transfer credit risk on a pool of jumbo mortgages. Unlike traditional MBS, loans in the transaction will remain on the bank’s balance sheet.

Originations of higher-priced non-government mortgages increased by 11% in 2018. The loans can’t receive safe harbor QM status and many higher-priced mortgages are required to include escrow accounts. (Includes two data charts.)

Originations of reverse mortgages are dominated by FHA loans. However, there’s a loan limit on FHA loans, allowing Reverse Mortgage Funding and other lenders to develop a market for proprietary products.

The CFPB is considering whether to provide QM status to mortgages that didn’t miss payments in the early years after origination. The proposal has support from some lenders.

There’s no consensus among industry participants on how the CFPB should address the “patch” for qualified mortgages. However, lenders generally agree that Appendix Q of the ATR rule needs a major overhaul.

The debate around the qualified mortgage “patch” has shifted to whether the non-agency market can handle the volume that currently is delivered to the GSEs.

Denial rates on jumbo mortgages varied in 2018. Denials of applications for purchase mortgages declined while those for refis increased. Denial rates also differed widely among banks and nonbanks. (Includes one data chart.)

Originations of adjustable-rate mortgages outpaced total first-lien production in the second quarter. ARMs accounted for 13% of originations in the first half of the year. (Includes data chart.)

Production of interest-only mortgages by a select group of lenders increased by more than 65% in the second quarter. Data from HMDA provides new insight on the characteristics of IO borrowers. (Includes data chart.)