A federal judge in New York has cleared the way for investors to proceed with a $10 billion class-action suit against JPMorgan in relation to the 2007 sale of non-agency MBS. Judge Paul Oetken of the U.S. District Court for the Southern District of New York, however, limited the scope of the class-action suit to JPMorgan’s liability but did not certify as to damage. Explaining his decision to narrow the scope of the suit, Oetken said...

Some $3.05 billion in jumbo mortgage-backed securities were priced in the third quarter of 2014, nearly triple the volume seen in the previous quarter, according to a new ranking and analysis by Inside Nonconforming Markets. Issuance through three quarters is still below the level of jumbo MBS activity in 2013 but industry analysts suggest that the jumbo MBS market looks strong heading into the fourth quarter and beyond. Credit Suisse was the top issuer of jumbo MBS ... [Includes one data chart]

A shift from refinances to purchase mortgages has helped push combined loan-to-value ratios on jumbo mortgage-backed securities to the highest levels since the financial crisis. The higher LTV ratios are prompting an increase in credit enhancement requirements. JPMorgan Chase this week issued a $355.64 million jumbo MBS with an average combined LTV ratio of 74.0 percent. And WinWater Home Mortgage is preparing a $276.91 million jumbo MBS with an average combined LTV ratio of ...

To this point, most products offered outside of standards for qualified mortgages have targeted super-prime borrowers, often with jumbo loan balances. However, competition among lenders in that sector has been strong and there are plenty of borrowers with somewhat less than perfect credit looking for non-QMs, prompting some lenders to work on expanding their non-QM offerings. Brian Simon, COO of New Penn Financial, said the nonbank is launching a non-QM for borrowers who have ...

Only one nonbank claimed more than a 1.0 percent share of originations of non-agency jumbo mortgages in 2013, according to a new Inside Nonconforming Markets analysis of Home Mortgage Disclosure Act data. Quicken Loans, the 10th-ranked jumbo lender in 2013, accounted for 1.26 percent of jumbos originated during the year, even after growing its originations at more than double the industry average compared with 2012. Banks were the top nine jumbo lenders in 2013 ... [Includes one data chart]

A number of participants in the non-agency market are working to address the risks posed by second liens taken out by borrowers after the origination of the first mortgage. Some potential investors in non-agency mortgage-backed securities have balked at buying into new issuance due to concerns about borrower leverage and equity positions. “That’s a big problem for insurance companies and institutional investors, that debt can morph over time,” Fred Matera, a managing director at Redwood Trust ...

Issuers of non-agency mortgage-backed securities appear likely to continue working in the private 144A market as opposed to issuing deals in the public market, according to industry participants. Redwood Trust was issuing jumbo MBS in the public market, but it switched to the 144A market even before new requirements from the Securities and Exchange Commission made private issuance more attractive. Most other jumbo MBS issuers in recent years have also stuck with offering their deals in ...

Social Finance, a nonbank that has focused on refinancing student loans, launched a jumbo mortgage lending program this week. The lender is offering loans with downpayments as low as 10 percent and balances as high as $3.0 million with no requirement for private mortgage insurance. SoFi is offering 30-year fixed-rate mortgages and adjustable-rate mortgages, including a 5/5/20 ARM with a 10-year interest-only period. SoFi said it is looking to originate ... [Includes one brief]

FHA to Extend Short Refi Program. The FHA has announced its intent to extend its Short Refinance Program for borrowers in negative equity positions. A mortgagee letter will be issued soon to announce the extension. Feedback Period extended for Draft Servicing Section of Proposed Single Family Handbook. The FHA is extending the comment period for the draft servicing section of the Single Family Housing Policy Handbook through Nov. 14, 2014 to allow stakeholders additional time to study and comment on the proposed section. The original deadline date was Oct. 17. CFPB Updates Reverse Mortgage Guide. The Consumer Financial Protection Bureau recently updated its reverse mortgage guide on its website to account for recent changes made by the Department of Housing and Urban Development to its Home Equity Conversion Mortgage program. The updated guide highlights new limits to ...

The Treasury Department is working on at least two initiatives aimed at boosting issuance of non-agency mortgage-backed securities, following more than four years of industry-driven reform efforts that haven’t attracted enough attention from investors. “The private-label securities market is virtually dormant,” Olga Gorodetsky, a senior policy advisor at the Treasury, said this week at the ABS East conference produced by Information Management Network in Miami Beach. The Treasury is considering working with ...