Social Finance is originating $70 million per month in jumbo mortgages and is considering issuing a jumbo mortgage-backed security, according to industry participants that have met with officials at the marketplace lender. Adjustable-rate mortgages accounted for approximately 25.0 percent of jumbo originations in May, according to Black Knight Financial Services. The firm said the jumbo ARM share of originations has declined from 29.0 percent as recently as ... [Includes five briefs]

Upgrades of ratings on structured finance products hit an all-time high in 2015, according to a study released this week by S&P Global Ratings. The study tracked ratings across sectors and the world, while the U.S. residential MBS sector showed mixed performance. S&P said it had 30,359 ratings outstanding on global structured finance securities at the beginning of 2015. During the year, 9.8 percent of the ratings were upgraded. The rating service said upgrades in 2015 were most prevalent on structured credit deals in Europe and the U.S. Some 11.2 percent of S&P’s ratings were downgraded...

The issuance of prime non-agency mortgage-backed securities in 2016 is well below the relatively meager levels seen in recent years, according to a new ranking and analysis by Inside Nonconforming Markets. Some industry participants have blamed the lack of activity on the Truth in Lending Act/Real Estate Settlement Procedures Act disclosure rule that took effect in October. Although there are signs the market has adjusted to TRID, only two ... [Includes one data chart]

The $1.89 billion non-agency mortgage-backed security issued by JPMorgan Chase Bank in April looked promising for boosters of the non-agency MBS market. However, analysts at one of the firms that rated the deal suggest that a number of factors could limit other banks from following Chase’s lead. “Some banks are likely hesitant to securitize loan portfolios because securitizations could reduce return on equity at a time when banks are already struggling to meet ...

HSBC Finance announced in June that it reached a $1.58 billion settlement on a subprime mortgage-related lawsuit filed back in 2002. The shareholder class-action lawsuit centered on activities by Household International, which was acquired by HSBC for $14.6 billion in 2003. The lawsuit claimed Household International and officials at the company made false or misleading statements about predatory lending practices, the quality of its loan portfolio, and the company’s ...

Bank and thrift holdings of non-agency mortgage-backed securities continue to decline on aggregate, mirroring the gradual drop in the amount of outstanding non-agency MBS. Banks and thrifts held $78.66 billion of non-agency MBS as of the end of the first quarter of 2016, according to a new ranking from the Inside Mortgage Finance Bank Mortgage Database. The holdings declined by 5.0 percent from the previous quarter and by ... [Includes one data chart]

The Consumer Financial Protection Bureau announced this week that an undisclosed number of lenders were found to be improperly disclosing interest-only payments on IO bridge mortgages, in violation of Regulation Z. The CFPB said the inaccurate disclosures were due to a software error as the lenders erroneously included a portion of the monthly payment amount that was to be applied to fees financed into the principal balance ... [Includes six briefs]

A federal appeals court in New York this week will hear arguments from African-American subprime borrowers in Detroit in connection with a proposed class action challenging Morgan Stanley’s mortgage securitization practices during the subprime mortgage boom. The American Civil Liberties Union and its partners are seeking class-action status for the borrowers’ Fair Housing Act claims, which were initially rejected by a lower court. The court previously ruled that each borrower would have to sue on his or her own. The issue on appeal at the U.S. Court of Appeals for the Second Circuit is...

Originations of interest-only mortgages increased sharply in the first quarter of 2016, according to a new analysis by Inside Nonconforming Markets. A group of 12 lenders originated $8.72 billion in IOs in the first quarter, up 26.9 percent from the previous quarter and a 29.8 percent increase from same period in 2015. IO originations in the first three months of 2016 even topped the $8.61 billion in IO originations by the lenders in the second quarter of 2015. [Includes one data chart] ...

Lone Star Funds is preparing to issue a $161.71 million nonprime mortgage-backed security that will close next week. COLT 2016-1 Mortgage Loan Trust received an A rating from DBRS and Fitch Ratings. The deal marks the first nonprime MBS backed by new originations to receive a rating since the financial crisis. It will also be the largest post-crisis nonprime MBS issued to date, topping a $150.35 million MBS from Angel Oak Capital Advisors in December. Officials at Fitch Ratings said ...