Affordable housing advocates are calling for changes to the mortgage interest deduction allowed for federal taxes. Interest on up to $1.0 million in principal is currently deductible. The National Low Income Housing Coalition recently published a report supporting its call for the cap on the mortgage interest deduction to be lowered to loan balances of $500,000 and below. “There is no policy rationale for the federal government to continue to subsidize the portion of mortgages that ...

Risk-retention requirements established by the Dodd-Frank Act for certain non-agency mortgage-backed securities took effect at the end of 2015. Industry analysts suggest that the requirements will have minimal impact on industry participants’ current practices. “Risk-retention rules will not affect overall residential MBS issuance levels because qualified mortgage issuers will be exempt from risk-retention rules, and non-QM issuers already retain risk,” according to analysts at Moody’s Investors Service ...

The omnibus appropriations bill President Obama signed in December included a provision that supporters suggest will help spur reform of the government-sponsored enterprises. The bill prohibits the Treasury Department from selling its senior preferred shares in Fannie Mae and Freddie Mac until at least the start of 2018. “Passage of this provision makes it clear that Congress – which created mortgage giants Fannie Mae and Freddie Mac in the first place – should ... [Includes three briefs]

Originating nonprime mortgages can be done without repeating the mistakes that contributed to the financial crisis, according to officials at Angel Oak Mortgage Solutions. The firm, one of the most prominent lenders in a severely constrained market, launched in early 2014 and offers nonprime mortgages via wholesale and correspondent channels. Tom Hutchens, a senior vice president of sales and marketing at Angel Oak, said the lender is comfortable extending ...

A $56.26 million nonprime mortgage-backed security from Beach Point Capital is scheduled to close next week, according to sources close to the deal. RCO 2015-NQM1 Trust will be backed by mortgages originated by Citadel Loan Servicing, which will also service the loans. The deal will mark the third post-crisis MBS backed by newly originated mortgages, following two MBS from Lone Star Funds’ Colt Funding, including a deal issued last week. Nomura is the placement agent and seller ...

The first jumbo mortgage-backed security from a subsidiary of Hatteras Financial received relatively strong reviews from rating services. The $231.18 million Onslow Bay Mortgage Loan Trust 2015-1 received AAA ratings with credit enhancement of 8.55 percent on the senior tranche. DBRS and Standard & Poor’s said that while they find Onslow Bay to be an acceptable aggregator, they increased the required credit enhancement on the MBS somewhat due to Hatteras’ lack of experience ...

Originations of adjustable-rate mortgages have not kept pace with overall mortgage production this year, according to a new ranking and analysis by Inside Nonconforming Markets. An estimated $152 billion in ARMs were originated through the first three quarters of 2015, down 10.1 percent from the same period last year. In that span, total first-lien production has increased by 42.9 percent, according to estimates by affiliated publication Inside Mortgage Finance ... [Includes one data chart]

Less than 1.0 percent of the dollar volume of jumbo mortgages originated in 2014 would have been eligible for sale to the government-sponsored enterprises based on higher GSE loan limits that are set to take effect next year in nine metro markets, according to an Inside Nonconforming Markets analysis of data from the Home Mortgage Disclosure Act. The Federal Housing Finance Agency recently announced that high-cost loan limits will increase in 39 counties next year, with limits ...

The highway funding bill signed into law last week included a provision that expanded exemptions to standards for qualified mortgages. QMs generally cannot have balloon-payment features, though some small lenders in rural areas have been allowed to originate balloon mortgages that can be classified as QMs. Previously, the QM balloon exemption applied to small lenders that operate predominantly in rural or underserved areas. H.R. 22, the Fixing America’s Surface Transportation Act ...

Compliance issues involving disclosure requirements that took effect in October could be delaying the issuance of jumbo mortgage-backed securities, according to a report this week from Moody’s Investors Service. The rating service said several third-party review firms found compliance violations on more than 90 percent of a sample of 300 mortgages reviewed for compliance with the TILA-RESPA Integrated Disclosure rule. Many of the TRID violations were ... [Includes three briefs]