Ellington Financial plans to start acquiring non-qualified mortgages by early summer, according to officials at the nonbank. While Ellington has always seen value in the non-agency market, to this point the company has largely focused its non-agency investments on mortgage-backed securities and other structured-finance products. Laurence Penn, Ellington’s president and CEO, said the nonbank signed its first flow agreement for non-QMs at the end of the first quarter. “Consistent with ...

A sharp divide in the decline of nonprime mortgages held by the government-sponsored enterprises persists, according to a new analysis by Inside Nonconforming Markets. Holdings of nonprime mortgage-backed securities are down much more sharply at Fannie Mae and Freddie Mac than the GSEs’ holdings of purchased or guaranteed nonprime loans. Fannie and Freddie held a combined $50.78 billion in nonprime MBS as of the end of ... [Includes one data chart]

Ocwen Financial filed its annual report for 2014 this week and noted that its auditors decided against requiring a “going concern” qualification for the nonbank. “We believe the filing of our annual report, without a qualification as to our ability to operate as a going concern, is additional evidence that our strategy to strengthen our compliance management system, strengthen the service we provide to our customers and improve our financial stability is working and that confidence ...

Two types of shared-appreciation transactions are being touted as beneficial to borrowers, either allowing them to buy homes at below-market prices or receive advanced payment for expected appreciation. Analysts at the Urban Institute note that nonprofit housing associations and municipalities offer shared-appreciation programs that can make homes more affordable for first-time buyers, people with bad credit or buyers who lack the necessary downpayment or income to ...

New lenders that specialize in loans that don’t meet the government’s qualified-mortgage standards continue to draw up blueprints and raise capital – or at least try to – but very few of them are banking on securitization as a take-out strategy. However, all that may change with the launch of LendSure Financial Services, a San Diego startup headed by a handful of veterans from the subprime industry of yesteryear, including Jim Konrath, Stu Marvin and Joe Lydon. According to one non-agency investor briefed on LendSure’s plans, securitization is...

The Treasury Department is making progress corralling various participants in the non-agency mortgage-backed security market, slowly prompting changes aimed at attracting large investors. The effort started nearly a year ago, when Michael Stegman, counselor to the Treasury on housing finance policy, first proposed the issuance of a benchmark transaction in November. “The benchmark transaction process has reset relationships among transaction parties and is ...

Hatteras Financial has started to acquire jumbo adjustable-rate mortgages that offer more attractive returns than agency mortgages. Officials at the real estate investment trust note that while Hatteras started operations in 2007, the REIT did not start investing in individual loans until December. “I’m not sure that we know 100 percent what the extent of the opportunity is going to be,” Michael Hough, Hatteras’ chairman and CEO, said during a recent call with investors. “It is something ...

Five Oaks Investment this week issued its first jumbo mortgage-backed security, although the real estate investment trust has contributed to jumbo MBS issued by others. The $267.19 million Oaks Mortgage Trust Series 2015-1 received largely favorable reviews from the rating services, though Five Oaks’ lack of a track record in the jumbo MBS market helped prompt credit enhancement of 8.45 percent on the senior tranche. Both Fitch Ratings and Moody’s Investors Service said they found that ...

First Republic Bank maintained its lead as the top contributor to jumbo mortgage-backed securities issued in the first quarter of 2015, according to a ranking by Inside Nonconforming Markets. First Republic was identified as contributing $1.43 billion to jumbo MBS issued during the quarter, accounting for 31.0 percent of all jumbo MBS activity. The bank was also the top jumbo MBS contributor for all of 2014, with $1.46 billion in identified contributions ... [Includes one data chart]

Credit Suisse and Redwood Trust, the two dominant jumbo mortgage-backed securities issuers since 2010, continue to differ in terms of jumbo MBS offerings. While their latest deals include a number of similarities involving credit characteristics, the Redwood deal includes a relatively high share of non-qualified mortgages. The $356.45 million Sequoia Mortgage Trust 2015-2 received AAA ratings with credit enhancement of 5.00 percent on the senior tranche. That’s the lowest ...