Performance data on nonprime mortgages originated by Caliber Home Loans in recent years suggest that it’s possible to originate loans to borrowers who don’t qualify for agency financing without experiencing major delinquencies. Caliber started originating non-agency mortgages in its portfolio loan program in the fourth quarter of 2014. None of the mortgages have been 60 or more days past due, according to a term sheet for a pending nonprime mortgage-backed security ...

The issuance of three non-agency mortgage-backed securities in quick succession suggests that industry participants have adjusted to liability posed by the Truth in Lending Act/Real Estate Settlement Procedures Act disclosure rule. Jumbo MBS from JPMorgan Chase and Redwood Trust along with a nonprime MBS from Lone Star Funds all included mortgages subject to TRID and loans with TRID exceptions. TRID was seen as a major impediment to non-agency MBS issuance ...

A $412.66 million jumbo mortgage-backed security planned by a unit of JPMorgan Chase received high marks from rating services save for the representations-and-warranty framework on the MBS. Presale reports on JPMorgan Mortgage Trust 2016-1 were published last week, with AAA ratings from DBRS, Fitch Ratings and Moody’s Investors Service. Some 15 lenders contributed to the planned MBS, led by New Penn Financial with a 19.7 percent share, Primary Capital Mortgage ...

Overture Technologies announced this week that it added support for trended credit data to its automated underwriting system for non-agency mortgages. Trended credit data detail a potential borrower’s use and repayment of revolving credit over time. “Lenders, particularly those specializing in loans to borrowers with previous bankruptcy or housing defaults, can leverage this data to understand how consumers have managed their use of ... [Includes six briefs]

Redwood Trust is preparing to issue a $344.89 million jumbo mortgage-backed security next week, according to a presale report from Kroll Bond Rating Agency. Most of the mortgages in the planned deal are subject to the TRID mortgage disclosure rule. The combined Truth in Lending Act/Real Estate Settlement Procedures Act rule from the Consumer Financial Protection Bureau took effect in early October. Since then, only one jumbo MBS has included TRID loans ...

Bank and thrift holdings of first-lien mortgages as of the end of the first quarter of 2016 declined compared with the end of 2015, according to an Inside Nonconforming Markets analysis of bank and thrift call reports. Banks and thrifts held $1.85 trillion in first-lien residential mortgages at the end of March, down 1.0 percent from the end of December. But industry holdings were up 1.6 percent from March 2015, suggesting that banks still have plenty of ... [Includes one data chart]

Hopes for a resurgence of issuance of non-agency mortgage-backed securities backed by new mortgages appear to be tied more to banks than to steps Congress might take to reduce the government-sponsored enterprises’ footprint, according to industry analysts. Since the financial crisis, banks have largely opted to hold non-agency originations in portfolio instead of issuing MBS. According to an analysis by Bank of America Merrill Lynch, capital requirements have given banks ...

Officials at Bayview Loan Servicing note that the loans available to correspondents and brokers in the lender’s portfolio lending program allow borrowers shut out from agency mortgages to qualify. “All of the agency and qualified mortgage products that are out there look the same,” Ski Swiatkowski, vice president of portfolio product marketing at Bayview, said last week during a webinar hosted by the lender. Bayview, whose owners include affiliates of The Blackstone Group, offers five ...

The public mortgage-backed security shelf recently filed by Redwood Trust was drafted with significant input from the Securities and Exchange Commission, according to a review of correspondence between the jumbo MBS issuer and the SEC. After Redwood’s new Form SF-3, which allows for $4.83 billion in MBS issuance, was published in mid-May, the SEC released four letters sent to Redwood during the drafting stage for the shelf. Redwood’s responses to the SEC’s inquiries were also ...

Determining a self-employed borrower’s ability to repay can be one of the more challenging underwriting tasks for non-agency lenders. Shelley Callaghan, a senior marketing program manager at MGIC, said one of the main issues to consider when underwriting borrowers with income from partnerships or S corporations is the pattern of cash distributions from the business to the potential borrower. A number of nonbanks have launched non-agency programs for self-employed ...