Investors showed strong appetite for the largest non-agency mortgage-backed security backed by post-crisis nonprime originations. The $402.65 million COLT 2017-1 priced at tighter yields than any other post-crisis rated nonprime MBS amid stronger demand for mortgage credit, according to analysts at Deutsche Bank Securities. The deal from an affiliate of Lone Star Funds priced near the end of April and closed last week. “The transaction was priced at the tightest level ...

More buyers and sellers are getting into the whole-loan market for non-jumbo loans, especially nonprime mortgages, industry experts said. That’s especially true for loans that don’t meet the qualified-mortgage standard, said Matthew Nichols, CEO and founder, Deephaven Mortgage, during a panel session at last week’s secondary market conference sponsored by the Mortgage Bankers Association. Three keys spurred the market last year, he explained. First, performance of ...

Ocwen Financial announced last week that it’s negotiating an agreement with New Residential Investment involving mortgage servicing rights for non-agency mortgages. The agreement would reduce the servicing fee Ocwen receives but provide the company some stability and an equity investment. Before the agreement, New Residential owned rights to MSR on mortgages serviced by Ocwen with an unpaid principal balance of $117.0 billion. The loans are in non-agency ...

The Republican effort to reform many aspects of the Dodd-Frank Act was approved by the House Financial Services Committee last week on a party-line vote. The Financial CHOICE Act will likely be approved by the full House at some point, but DFA reform doesn’t appear to be a priority in the Senate. The House panel approved H.R. 10, the Financial Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs Act, on a 34-26 vote after a three-day markup ...

Wells Fargo is planning to issue non-agency mortgage-backed securities this year, Franklin Codel, a senior executive vice president of consumer lending at the bank, said during an investor presentation this week. It will be the first post-crisis non-agency MBS from Wells. He said the deals will help test whether Wells can improve investor confidence in non-agency MBS. Ellington Financial plans to issue a non-agency mortgage-backed security backed by ... [Includes four briefs]

Among the handful of lenders that provide relatively early reporting of their jumbo origination activity, production was down significantly in the first quarter of 2017 compared with the previous quarter, according to an analysis by Inside Nonconforming Markets. Officials at the lenders noted that seasonal factors contributed to the slowdown along with an increase in interest rates. And the lenders stress that originations are likely to rebound. First Republic Bank funded $2.52 billion ...

An affiliate of Lone Star Funds is set to issue the largest nonprime mortgage-backed security backed by post-crisis originations. The deal will be nearly twice the size of the previous record holder, which was also issued by Lone Star. Most of the mortgages in COLT 2017-1 Mortgage Loan Trust were originated by Lone Star’s Caliber Home Loans, along with a 22.0 percent share for loans originated by Sterling Bank and Trust. The deal received preliminary AAA ratings from DBRS, Fitch Ratings ...

Bank of America has made a break from most of the other big banks in terms of sending conforming mortgages to the government-sponsored enterprises. Officials at the bank said BofA is retaining more of its GSE-eligible loans, though the strategy can result in short-term decreases to mortgage-banking income. “We believe retaining these mortgages will provide better economics over time, plus retention deepens our relationship with these customers,” Paul Donofrio, BofA’s chief financial officer ...

Lenders offering non-qualified mortgages that rely solely on a borrower’s assets need to carefully prove the borrower’s ability to repay, according to guidance from the Consumer Financial Protection Bureau. In a notice issued this week, the regulator cautioned that a large downpayment alone isn’t sufficient to prove a borrower’s ability to repay a non-QM that is based on the consumer’s assets. The spring edition of the CFPB’s supervisory highlights publication provides insights from ...

Last week, the Consumer Financial Protection Bureau and many state regulators took coordinated actions against Ocwen Financial, alleging a number of servicing problems. Ocwen, the largest subprime servicer, disputes the allegations. The CFPB lawsuit, along with lawsuits and cease-and-desist orders from at least 24 state regulators, could be catastrophic for Ocwen. Most of the cease-and-desist orders prevent the company from originating mortgages until it proves it can appropriately ...