The jumbo mortgage-backed security Redwood Trust is set to issue on Jan. 20 received improved pricing compared with the company’s previous deal issued in October. The new MBS is fairly similar to the prior bond, indicating stronger demand from investors. The $343.28 million Sequoia Mortgage Trust 2017-1 priced last week. The super-senior tranche priced 1-20 back of Fannie 3.5s, which was four ticks tighter than Redwood’s previous offering, according to an analysis by Wells Fargo Securities ...

Large swaths of investors will continue to avoid buying non-agency mortgage-backed securities unless Congress passes investor-friendly reforms, according to Chris Katopis, executive director of the Association of Mortgage Investors. “Private capital has virtually left the U.S. mortgage market,” he said. “The future is likely to reflect a similar situation unless Congress helps establish the necessary systems, structures and standards for private capital to return.” In a recent study published by ...

The types of home loans included in prime non-agency mortgage-backed securities issued during the fourth quarter of 2016 varied somewhat compared with issuance from recent quarters, according to an analysis by Inside Nonconforming Markets. Some $907.8 million in prime non-agency MBS was issued during the fourth quarter. Collateral in the deals shifted more toward adjustable-rate mortgages, interest-only mortgages and refinances. ARMs ... [Includes one data chart]

A significant number of borrowers with subprime mortgages originated in 2002 and beyond are prime targets for refinances, according to analysts at Black Knight Financial Services. More than 600,000 subprime mortgages are currently performing, according to Wesley Winter, a senior modeler at Black Knight. He said that while all of the borrowers aren’t necessarily attractive targets for refinances, there’s $10.0 billion to $25.0 billion in potential refi opportunities involving ...

NewLeaf Wholesale recently added four products to its “specialty” mortgage offerings with relatively lenient underwriting standards. The loans are aimed at borrowers who don’t qualify for conforming mortgages. The lender is now offering a jumbo mortgage that allows loan-to-value ratios up to 90.0 percent without private mortgage insurance, a residual-income product, an asset-depletion product and a product for foreign investors. The loans join NewLeaf’s other specialty products ...

With President-elect Donald Trump set to take office and Republicans in control of Congress, trade groups representing banks reiterated calls for revisions to standards for qualified mortgages. Banks are pushing for QM status to be applied to any mortgage held in portfolio, even if the loans have characteristics that would otherwise make them non-QMs subject to greater liability. In a letter this month to leaders of Congress, Rob Nichols, president and CEO of the American Bankers Association ...

Shared-equity mortgage arrangements from for-profit investors offer help for borrowers that otherwise might not qualify for a mortgage while also introducing risks, according to analysts at the Urban Institute’s Housing Finance Policy Center. In a shared-equity transaction, a third party helps a mortgage borrower purchase a home in exchange for some of the home-price appreciation. The HFPC noted that shared-equity transactions reduce the amount of money required from ...

The Department of Justice this week finalized previously announced settlements with Deutsche Bank and Credit Suisse regarding non-agency mortgage-backed security activities in the run-up to the financial crisis. The DOJ said the $7.20 billion settlement with Deutsche Bank was the single largest residential MBS resolution for the conduct of a single entity. The settlement with Credit Suisse was for $5.28 billion. Both of the settlements included civil penalties and ... [Includes two briefs]

In 2016, a mere $42.93 billion of non-agency MBS were issued, down 32.5 percent from the previous year, according to a new Inside MBS & ABS ranking and analysis. It was the second-lowest annual output since 2012. The picture would look a bit brighter if Fannie Mae and Freddie Mac credit-risk transfer deals were included, as well as single-family rental securitizations, which both compete for the investors that might be interested in non-agency MBS. But the government-sponsored enterprise CRT deals are debt issues and they couldn’t be any more “agency,” while the SFR securitizations look a lot more like commercial MBS than residential MBS. The prime jumbo market hit...[Includes three data tables]

With structured finance performance having peaked for many sectors, analysts at Fitch Rating and S&P Global Ratings anticipate some modest asset-level deterioration in 2017 – most notably in both prime and subprime auto ABS. On the other hand, they expect relatively stable performance from credit card ABS. “Both prime and subprime auto ABS loss rates could be...