After issuing two jumbo mortgage-backed securities in 2017 on a shelf created by Credit Suisse, an affiliate of AIG Asset Management is launching a deal on its own. Pearl Street Mortgage Company 2018-1 looks a lot like previous AIG deals save for the change in shelf registration. However, the planned $446.17 million issuance will have somewhat higher credit enhancement on the senior tranche than the other MBS. The new issuance received preliminary AAA ratings from Fitch Ratings and ...

With comprehensive housing-finance reform looking unlikely to be passed by Congress anytime soon, some industry analysts project that the Trump administration will take administrative actions to shrink the roles of the government-sponsored enterprises. Under a plan detailed last week by the American Enterprise Institute, the GSEs could be eliminated over time without legislation, with the non-agency market filling the void. The “Taxpayer Protection Housing Finance Plan” was ...

Embrace Home Loans hired a former official from Deephaven Mortgage to serve as director of mortgage product innovation. Deephaven has focused its correspondent production on non-qualified mortgages while Embrace is looking to expand its retail products. Parkes Dibble, the new hire, was previously a vice president of capital markets product development at Deephaven. Embrace said Dibble will lead efforts to strengthen the “depth and breadth” of ... [Includes two briefs]

A number of lenders are trying to grow the expanded-credit mortgage market, but top producers in the sector saw an overall decline in originations last year, according to a new ranking by Inside Nonconforming Markets. The 15 top lenders originated $40.96 billion of expanded-credit mortgages last year, down 16.3 percent from 2016. The ECM category consists mostly of non-qualified mortgages and nonprime/Alt A loans that aren’t eligible for sale to the agencies ... [Includes one data chart]

Prices for jumbo mortgages softened near the end of 2017 and then markedly improved in the first two months of this year, according to officials at Redwood Trust. “As they often do, market conditions rebounded in January and we took full advantage,” Dashiell Robinson, an executive vice president at Redwood, said this week during the real estate investment trust’s earnings call. The company priced five non-agency mortgage-backed securities in January and February at much better execution ...

Plans at Wells Fargo to issue non-agency mortgage-backed securities in 2017 didn’t come to fruition. But growth limitations recently placed on the bank by the Federal Reserve have prompted speculation that Wells could issue non-agency MBS this year. This month, the Fed issued a cease and desist order that temporarily limits the firm’s maximum total consolidated assets to the level they were as of the end of 2017. The order was one of the last acts of former Fed Chair Janet Yellen, who ...

The federal budget plan released by the Trump administration last week recommended increasing the guarantee fees charged by Fannie Mae and Freddie Mac. Higher g-fees would help non-agency lenders compete with pricing offered by the government-sponsored enterprises, according to the Trump administration. Currently, a 10 basis point fee is added to the GSEs’ g-fees to help support a 2011 payroll tax cut. The fee is scheduled to expire at the end of 2021 and will ...

The difference in interest rates for non-agency jumbo mortgages compared with conforming mortgages is often reported based on average interest rates. According to an analysis by researchers at the Federal Reserve Bank of New York, looking at average rates obscures some major differences in pricing for jumbos and mortgages eligible for sale to the government-sponsored enterprises. The researchers used data from Optimal Blue, a mortgage processor that allows lenders to ...

Ellington Financial is looking to ramp up activity involving non-qualified mortgages after a positive reception for its first mortgage-backed security. In November, Ellington issued a $141.2 million MBS predominantly backed by non-QMs. The deal closed with “excellent execution and strong investor demand,” according to Laurence Penn, president and CEO of Ellington. Investors included Putnam Investments, Janus Henderson Investors and JPMorgan Asset Management. “We had a ...

S&P Global Ratings released a revised methodology and assumptions this week for non-agency mortgage-backed securities issued in 2009 and later. The revision included slightly more favorable treatment of mortgages to multiple borrowers and recalibrated loss severity assumptions, including an over/undervaluation framework that incorporates property values in markets compared with price-to-income ratios. New Penn Financial loosened ... [Includes two briefs]