Rep. Andy Barr, R-KY, used a recent hearing by the House Financial Services Committee as an opportunity to promote a bill that would grant qualified mortgage status to loans held in portfolio. He was particularly critical of an exemption in QM standards that currently applies to mortgages eligible for purchase by the government-sponsored enterprises. Such loans can have debt-to-income ratios above 43 percent and still be deemed safe-harbor QMs. “The policy is counterproductive ...

The IRS approved Bank of America’s $8.5 billion settlement involving vintage non-agency mortgage-backed securities this week. The approval paves the way for investors to receive funds from a settlement that was announced in 2011. Mortgages play a role in a dispute between a former internal auditor at BofI Holding and the bank. Matt Erhart, the former auditor, filed a federal lawsuit this week with a wide range of allegations, including that BofI ... [Includes two briefs]

The much-anticipated $150 million nonprime MBS deal from Angel Oak Mortgage Solutions appears to have hit a brick wall with concerns arising over representations and warranties on the transaction, according to one high-level source who claims to have knowledge of the deal. Both Angel Oak and the underwriter, Nomura Securities, this week once again did not return several media inquiries on what might have gone wrong. Originally, the bond – a privately issued transaction – was slated for sale to investors sometime in September but never came off. The source, who spoke to Inside MBS & ABS under the condition his name not be used, said...

The volume of jumbo mortgage-backed securities issued in the third quarter of 2015 fell 17.7 percent compared with the previous quarter, according to a new ranking and analysis by Inside Nonconforming Markets. It was the second consecutive quarterly decline for jumbo MBS issuance after production hit $4.60 billion in the first three months of the year. Five issuers combined to issue $2.56 billion in jumbo MBS in the third quarter. Two of them increased ... [Includes one data chart]

The recent ABS East conference prompted another round of introspection among participants in the non-agency mortgage-backed security market. While efforts to address concerns raised by potential investors are progressing, a multitude of issues continues to hamper non-agency MBS issuance. Issuers continue to focus on finding investors willing to buy AAA tranches of non-agency MBS. “Some of the AAA investors will come back when the pricing gets a little more ...

Moves by two players in the jumbo market demonstrate that competition for originations of jumbo mortgages remains strong. Officials at Titan Capital Solutions have confirmed that the firm will cease its correspondent funding operation for jumbos. “We made the decision as the space was becoming really crowded and those entering the space have much bigger, deeper pockets than Titan,” said Ruth Lee, the lender’s executive vice president. “It was a great channel ...

The inclusion of a deal agent or transaction manager in new non-agency mortgage-backed securities would significantly increase investors’ confidence in the sector, according to industry participants. Alessandro Pagani, a portfolio manager and head of securitized assets at Loomis Sayles, said a large number of institutional investors have pushed for a deal agent and the hope is that if non-agency MBS includes the feature, investors will buy into the deals ...

Add loan-originator compensation rules to the list of things hindering the origination of loans that fall outside the qualified-mortgage standard. Bob Magee, chief investment officer at Shellpoint Partners, said many loan officers and brokers are reluctant to work on non-QMs because the loans take more time to originate, often get rejected and yet tend to offer the same compensation as an agency mortgage. “If I have loan officers who are paid on a commission for ...

A quirk in the way the Consumer Financial Protection Bureau drafted standards for qualified mortgages has put non-agency lenders at a disadvantage, according to a former CFPB official that was heavily involved in drafting the ability-to-repay rule. At the recent ABS East conference, Peter Carroll, an executive vice president at Quicken Loans, reiterated calls for the CFPB to make adjustments to Appendix Q of the ATR rule. Appendix Q details documentation requirements ...

Sales of higher-priced mortgages – a proxy for nonprime loans – increased in 2014 compared with the previous year, according to an analysis by Inside Nonconforming Markets of data from the Home Mortgage Disclosure Act. Some $52.28 billion in higher-priced mortgages were sold in 2014, up 48.6 percent from the previous year. Sales to Ginnie Mae accounted for a large portion of the increase along with sales to other purchasers, including ... [Includes one data chart]