Starwood Property Trust announced this week that it agreed to purchase up to $600.0 million of non-qualified mortgages originated by Impac Mortgage Holdings in the next 12 months. The real estate investment trust also revealed that it has already acquired $900.0 million of non-QMs from Impac. “We are excited to formalize our partnership with Impac, which we believe will help scale our opportunity to provide non-QM loans to high-quality borrowers while sourcing ...

Originations of adjustable-rate mortgages declined in the first quarter of 2018 from the previous period, according to a new ranking and analysis by Inside Nonconforming Markets. ARM production slowed even with a rise in interest rates, and the products don’t appear to be popular with borrowers seeking purchase mortgages. An estimated $44.0 billion of ARMs were originated in the first three months of the year, down 20.0 percent from the fourth ... [Includes one data chart]

A $329.1 million non-agency mortgage-backed security issued by Flagstar Bank at the end of May could be a trendsetter. The deal was backed solely by investment-property mortgages eligible for sale to the government-sponsored enterprises. Moody’s Investors Service noted that pricing policies set by Fannie Mae and Freddie Mac will likely encourage similar deals. “We expect to see more private-label securities backed by GSE-eligible investment-property loans,” the rating service said ...

Fannie Mae and Freddie Mac holdings of nonprime mortgage assets continued to decline in the first quarter of 2018, although changes in how the two government-sponsored enterprises report this data make comparisons to earlier periods difficult. Fannie reported $3.42 billion fair market value of its nonprime MBS holdings as of the end of March, though this appears to result from moving some of these assets from its available-for-sale portfolio to ... [Includes one data chart]

Redwood Trust raised $194.0 million this week with the sale of convertible senior notes. Redwood said it will use the proceeds for various business and investment activities. The Capital Corps will launch a non-qualified mortgage program later this year. “The Capital Corps’ nontraditional prime borrowers come from the estimated $100.0 billion of homeowners seeking mortgages with loan-to-value ratios of less than 65.0 percent who are turned ... [Includes three briefs]

Expanded-credit products look to be a ray of sunshine in an otherwise gloomy mortgage market. Originations of the loans increased in the first quarter of 2018 while production in many other product categories declined, according to a new ranking and analysis by Inside Nonconforming Markets. An estimated $10.1 billion of expanded-credit mortgages were originated in the first quarter of 2018, up 3.1 percent from the previous quarter and a 13.5 percent ... [Includes one data chart]

The amount of jumbo mortgages handled by a large group of servicers increased in the first quarter, according to a new ranking by Inside Nonconforming Markets. The 30 servicers handled an estimated total of $1.05 trillion in jumbos as of the end of March, up 1.4 percent from the end of 2017 and a 13.5 percent increase from March 2017. Growth in jumbo servicing significantly outpaced trends in total mortgage debt outstanding. Some $10.65 trillion ... [Includes one data chart]

The Trump administration is likely to play a more active role in reducing the footprint of the government-sponsored enterprises in 2019, according to administration officials and industry analysts. Mel Watt’s term as director of the Federal Housing Finance Agency is set to end in January, allowing Trump to appoint a new director. The new director will likely take actions that are aligned with the Treasury Department’s goals for Fannie Mae and Freddie Mac, according to industry analysts ...

Prepayment rates on non-qualified mortgages are higher than the rates seen on legacy non-agency mortgages and performance for new production is better, according to industry analysts. “Nonprime non-QM loans have exhibited high voluntary prepayment speeds, resulting from credit curing and high initial mortgage interest rates,” analysts at Deutsche Bank Securities said. The voluntary prepayment rate on non-QM mortgage-backed securities ... [Includes one data chart]

TIAA and Angel Oak Companies look likely to price separate new MBS before the end of the second quarter, according to documents filed with the Securities and Exchange Commission. JPMorgan Chase is also preparing an MBS that could differ from its typical issuance. Merrill Lynch agreed to a settlement with the Securities and Exchange Commission this week regarding non-agency mortgage-backed security trading from 2009 through 2012 ... [Includes two briefs]