Issuance of prime non-agency mortgage-backed securities will increase next year, according to predictions from various industry analysts. Some see a gradual increase while analysts at Kroll Bond Rating Agency said volume could double when including so-called expanded-prime MBS. Kroll said prime non-agency MBS issuance could hit nearly $20.0 billion in 2018. “Assuming that spread tightening across structured finance remains at or near current levels, execution may continue to favor ...

The correspondent share of jumbo originations has risen in the past year while the retail share declined, according to a new analysis by Inside Nonconforming Markets. The survey found that correspondent production accounted for 18.1 percent of jumbo originations in the third quarter of 2017, up from a 14.3 percent share in the third quarter of 2016. During that time, the retail share of the lenders’ jumbo production fell from 81.3 percent to ... [Includes one data chart]

Some 55.2 percent of the loans in JPMorgan Chase’s forthcoming $883.8 million non-agency mortgage-backed security will be eligible for sale to the government-sponsored enterprises. Chase has included conforming mortgages in previous non-agency MBS but usually in smaller amounts. The GSE-eligible mortgages were largely originated by Chase, along with some contributions from loanDepot. The GSE-eligible mortgages have an average balance of $536,992 ...

Holdings of residential first-lien mortgages by banks and thrifts increased again in the third quarter of 2017, according to a new ranking and analysis by Inside Nonconforming Markets. Banks and thrifts held first liens with a total unpaid principal balance of $1.99 trillion as of the end of the third quarter, up 1.1 percent from the previous quarter and a 3.3 percent increase from a year ago. First-lien holdings are dominated by three big banks: Wells Fargo ... [Includes one data chart]

Significant investments in new non-agency whole loans are paying off, according to officials at Annaly Capital Management. The real estate investment trust started buying the loans in the second half of 2016 after acquiring Hatteras Financial. As of the end of the third quarter, Annaly held non-agency whole loans with an unpaid principal balance of $896.0 million. Whole loans accounted for 28.0 percent of Annaly’s residential credit portfolio as of the end of September, up from a ...

Investor demand for non-agency mortgage-backed securities with non-qualified mortgages appears to have been boosted by the performance of such deals issued in recent years. There have been some delinquencies – owing to somewhat loose underwriting standards – but investors have largely been protected from losses. DBRS recently analyzed 18 non-QM MBS issued since 2015 and found that only three deals had experienced losses as of September. A $150.4 million deal from ...

Citadel Servicing has increased its portfolio of nonprime mortgages in the past year and has taken steps to improve operations, according to Fitch Ratings. Citadel serviced mortgages with an unpaid principal balance of $1.1 billion as of the end of November, up from a $673.1 million portfolio as of the end of 2016. Some 1.8 percent of Citadel’s portfolio was 30 or more days delinquent as of November, according to Fitch. A significant portion of the portfolio was originated after ...

According to an analysis by Zillow, 11.2 percent of the 25.1 million homes that are currently worth enough to require a jumbo mortgage will fall under the conforming loan limit in 2018 due to higher loan limits established by the Federal Housing Finance Agency. The analysis was based on county-specific home prices and the assumption that jumbos allow a loan-to-value ratio no higher than ... [Includes two briefs]

Redwood Trust is looking to expand its footprint into funding originations by nonbanks as well as putting a greater emphasis on acquiring investment-property mortgages. The strategy announced this week was detailed one day after Redwood revealed that its CEO will retire in May. Officials said changes in the housing market have created opportunities for the real estate investment trust to “leverage our competitive strengths and expand our strategic mission.” They said funding ...

Regulatory reform legislation with limited bipartisan support is making its way through the Senate, and a change in leadership at the Consumer Financial Protection Bureau could provide further relief for the industry. This week, the Senate Committee on Banking, Housing and Urban Affairs approved a regulatory reform bill on a 16-7 vote. S. 2155, the Economic Growth, Regulatory Relief and Consumer Protection Act, would make adjustments to the standards for qualified mortgages ...