Banks have been retaining recent originations of jumbo mortgages in portfolio while selling vintage mortgage servicing rights to nonbanks or entering into subservicing agreements. And with the rise in interest rates, banks have increased their appetite for adjustable-rate mortgages. Banks held $1.76 trillion in first liens in portfolio as of the end of the second quarter of 2013, down only 0.1 percent from the second quarter of last year, according to a new ranking and analysis ... [Includes one data chart]

Appetite for jumbo mortgages among big banks has limited issuance of non-agency jumbo mortgage-backed securities in recent months. And analysts suggest that the next increase in the guaranty fees charged by the government-sponsored enterprises could shift even more production to bank portfolios instead of into non-agency MBS. Certain big banks continue to offer interest rates on jumbos that are below rates on comparable mortgages with conforming balances. For a 30-year fixed-rate non-agency jumbo with ...

Redwood Trust issued its latest non-agency jumbo mortgage-backed security last week, two days after presale reports on the deal were published. It was a quick turnaround for the real estate investment trust, as jumbo MBS investors have generally had at least a week to mull investing in deals before they close. The mortgages in the $346.32 million Sequoia Mortgage Trust 2013-11 also had an exceptionally young weighted-average loan age of 0.5 months, according to Kroll Bond Rating Agency ...

Credit Suisse issued its latest non-agency jumbo mortgage-backed security at the end of August, about one month after the previous issuance from the investment bank. Mortgages in the latest security, the $399.77 million CSMC Trust 2013-7, were seasoned an average of three months, according to DBRS. The mortgages have a weighted average interest rate of 3.875 percent. All of the mortgages have 30-year fixed-rate terms, and one has a 10-year interest-only feature. The deal received AAA ratings with ...

Correspondent lenders whose mortgages end up in non-agency jumbo mortgage-backed securities could be required by issuers to retain a portion of the risk from the issuance, according to the net risk-retention rule proposed last week by federal regulators. As with the risk-retention rule originally proposed in 2011, the new proposal allows security sponsors to require certain originators to retain risk on securitized assets. Issuers of non-agency MBS subject to risk-retention requirements would be ...

FHA lenders have gradually stretched to originate loans for borrowers with more modest credit scores in recent quarters, although these borrowers typically are better positioned to keep up with their payments, according to an Inside FHA Lending analysis of data released by the agency. The average credit score for single-family loans endorsed in the second quarter of 2013 was 693 – the lowest such average in nearly four years. This is partly the result of a shift toward more purchase-money mortgages, which generally have ... [1 chart]

Parties to trustee lawsuits challenging a city’s use of eminent domain to deal with foreclosures are gearing up for a face-off at an injunction hearing Sept. 13 in federal district court in San Francisco. The city of Richmond, CA, the defendant in the lawsuit, has suffered setbacks in the last few days and has yet to make good on its threat to initiate eminent domain proceedings after investor trustees rejected its offer to purchase distressed mortgages for restructuring. Wells Fargo and Deutsche Bank, acting as trustees for a group of ...

Originations of non-agency jumbo mortgages continued to increase in the second quarter of 2013, according to a new ranking and analysis by Inside Nonconforming Markets. The growth was fueled by banks offering highly competitive interest rates in an effort to retain jumbos in portfolio. Wells Fargo was the top-ranked jumbo lender through two quarters in 2013, by a wide margin. The lender had $21.87 billion in jumbo originations in the first half of 2013, accounting for 19.4 percent of ... [Includes one data chart]

Federal regulators next week will propose a new version of the controversial rule setting risk-retention requirements for issuers of non-agency mortgage securities that are not backed by qualified residential mortgages. Among other significant changes, the new proposed rule will likely eliminate premium capture cash reserve account requirements, according to the American Securitization Forum. The Federal Deposit Insurance Corp. has a meeting scheduled for Aug. 28 to discuss ...

Two Harbors Investment is set to issue its first non-agency jumbo mortgage-backed security. The real estate investment trust is working on building its jumbo conduit operations, but in the meantime, Two Harbors plans to securitize mortgages it purchased from Bank of America. Two Harbors’ $434.17 million Agate Bay Mortgage Trust 2013-1 is set to receive AAA ratings with credit enhancement of 7.70 percent for the top-rated tranche. Mortgages to be included in the security have seasoned for ...