Nonprime lenders allow credit scores as low as 500 and loan-to-value ratios up to 90.0 percent, but new originations don’t typically reach such extremes. According to an analysis by Inside Nonconforming Markets, the average credit score on loans in nonprime/Alt A mortgage-backed securities issued in recent years was 701.1. The average combined LTV ratio for the loans was 74.9 percent and the average debt-to-income ratio was 37.0 percent. The analysis ... [Includes one data chart]

Members of the House who are drafting housing-finance reform legislation are tackling a number of issues that impact the non-agency market. At a hearing last week by the House Financial Services Subcommittee on Housing and Insurance, Chairman Sean Duffy, R-WI, said the panel’s recent hearings were aimed at getting feedback for a new legislative proposal. Duffy also stressed that the effort should be bipartisan. “I believe that if we’re going to be successful not just in ...

A flurry of prime non-agency mortgage-backed securities priced in October with issuance from JPMorgan Chase, Flagstar Bank and American International Group totalling $2.13 billion. Chase brought a $911.1 million deal backed by a higher than usual share of mortgages eligible for sale to the government-sponsored enterprises. Some 46.7 percent of the dollar volume of loans backing JPMorgan Mortgage Trust 2017-4 was loans eligible for sale to Fannie Mae or Freddie Mac ...

Two regional banks posted varied results in terms of jumbo originations in the third quarter of 2017. Flagstar Bank boosted its production while First Republic Bank’s originations fell on a quarterly basis and were up compared with the third quarter of 2016. Flagstar had $2.90 billion in jumbo originations in the third quarter, a 31.8 percent increase from the previous quarter and up 61.1 percent from the third quarter of 2016. Officials at Flagstar noted that the bank’s jumbo originations were ...

Citadel Servicing Corp. continues to ready its first nonprime mortgage-backed security and received risk assessments from Morningstar Credit Ratings last week. The rating service evaluated Citadel as a lender and servicer, assigning it level-three rankings on a scale of one to four, with four being the worst. The assessment, along with a similar assessment by Fitch Ratings earlier this year, show that Citadel is taking steps toward issuing rated nonprime MBS. Sources close to ...

Banks tend to approve a much higher share of applications for jumbo mortgages than nonbanks, according to a new ranking and analysis by Inside Nonconforming Markets based on new Home Mortgage Disclosure Act data. In 2016, the denial rate for applications for jumbo mortgages was 18.6 percent. The rate tracks total loan applications for jumbo mortgages last year (495,213) and denied applications. The calculation excludes withdrawn applications and ... [Includes one data chart]

Underwriting standards for the mortgages included in prime non-agency mortgage-backed securities in the third quarter were largely unchanged from the types of loans seen in the market the past year, according to a new analysis by Inside Nonconforming Markets. The average credit score on prime non-agency MBS issued in the third quarter was 770.3, down from 772.3 the previous quarter but up from 766.4 in the third quarter of 2016. Average debt-to-income ... [Includes one data chart]

Investors in jumbo mortgage-backed securities face relatively low exposure to potential losses related to fires in California, according to an analysis by Moody’s Investors Service. The rating service said 2.9 percent of the outstanding mortgages in post-crisis jumbo MBS rated by Moody’s are in counties affected by the recent fires. And while some borrowers may suffer losses because of insufficient insurance coverage, Moody’s said hazard insurance and servicers’ ... [Includes two briefs]

It’s been a busy year in whole loan trading for MIAC Capital Markets. The advisory firm has sold $1.2 billion of product year to date, almost double what it did all of last year. And the way things stand today, 2018 could be even better. According to Steve Harris, managing director for MIAC, the reason for the pickup in activity is simple: growth in non-agency lending, coupled with stronger demand from depositories for loans that can help them meet Community Reinvestment Act requirements ...

Issuance of prime non-agency mortgage-backed securities increased by more than 50.0 percent from the second quarter to the third, while activity in the nonprime MBS market slowed, according to a new ranking and analysis by Inside Nonconforming Markets. Some $2.97 billion of prime non-agency MBS was issued in the third quarter, up 58.1 percent from the previous period. The deals were largely backed by jumbo mortgages, along with some loans ... [Includes one data chart]