Issuance of nonprime mortgage-backed securities picked up in November with new deals from Angel Oak Capital Advisors and Invictus Capital Partners. A $210.2 million MBS from Angel Oak is scheduled to close on Nov. 28 and a $253.1 million deal from Invictus closed last week. The deal from Angel Oak is the third nonprime MBS of the year from the firm and follows closely after a nonprime MBS from Deephaven Mortgage where Angel Oak contributed mortgages with an unpaid ...

California is a jumbo mortgage gold mine that’s dominated by banks, giving Banc of California an enviable starting point. BoC is also differentiating itself by focusing on non-qualified mortgages and avoiding the retail channel. BoC contributed $122.9 million of jumbo loans to a new mortgage-backed security from JPMorgan Chase. Selling loans into the securitization market is a significant shift for BoC, which had previously only contributed eight mortgages to a jumbo MBS issued in 2014 ...

Consumer advocates are pushing for changes that could impact the non-agency market, including raising concerns about the use of Federal Home Loan Bank advances and calling for revisions to standards for qualified mortgages. In a letter this month to the Federal Housing Finance Agency, a group of 136 consumer advocates were critical of Starwood Property Trust’s recently disclosed use of FHLBank advances to fund acquisitions of non-QMs. Starwood is a real estate investment ...

Issuance of expanded-prime non-agency mortgage-backed securities is heating up with a new participant in the market and a quick second deal from Redwood Trust. Ellington Financial is preparing to issue its first non-agency MBS, which will largely consist of non-qualified mortgages originated by LendSure Mortgage. Morningstar Credit Ratings and S&P Global Ratings assigned preliminary AAA ratings to the deal this week. “Ellington Financial’s ability to access the robust securitization markets ...

Redwood Trust increased its acquisitions of jumbo mortgages in the third quarter, helped by strong demand for jumbo mortgage-backed securities. The real estate investment trust acquired jumbos with a total unpaid principal balance of $1.50 billion in the third quarter, up 25.0 percent from the previous period and up 15.4 percent a year ago. Officials said spread tightening helped the REIT compete with banks for jumbos. In the third quarter, Redwood closed two super-prime jumbo MBS with ...

Nonprime lenders allow credit scores as low as 500 and loan-to-value ratios up to 90.0 percent, but new originations don’t typically reach such extremes. According to an analysis by Inside Nonconforming Markets, the average credit score on loans in nonprime/Alt A mortgage-backed securities issued in recent years was 701.1. The average combined LTV ratio for the loans was 74.9 percent and the average debt-to-income ratio was 37.0 percent. The analysis ... [Includes one data chart]

Members of the House who are drafting housing-finance reform legislation are tackling a number of issues that impact the non-agency market. At a hearing last week by the House Financial Services Subcommittee on Housing and Insurance, Chairman Sean Duffy, R-WI, said the panel’s recent hearings were aimed at getting feedback for a new legislative proposal. Duffy also stressed that the effort should be bipartisan. “I believe that if we’re going to be successful not just in ...

A flurry of prime non-agency mortgage-backed securities priced in October with issuance from JPMorgan Chase, Flagstar Bank and American International Group totalling $2.13 billion. Chase brought a $911.1 million deal backed by a higher than usual share of mortgages eligible for sale to the government-sponsored enterprises. Some 46.7 percent of the dollar volume of loans backing JPMorgan Mortgage Trust 2017-4 was loans eligible for sale to Fannie Mae or Freddie Mac ...

Two regional banks posted varied results in terms of jumbo originations in the third quarter of 2017. Flagstar Bank boosted its production while First Republic Bank’s originations fell on a quarterly basis and were up compared with the third quarter of 2016. Flagstar had $2.90 billion in jumbo originations in the third quarter, a 31.8 percent increase from the previous quarter and up 61.1 percent from the third quarter of 2016. Officials at Flagstar noted that the bank’s jumbo originations were ...

Citadel Servicing Corp. continues to ready its first nonprime mortgage-backed security and received risk assessments from Morningstar Credit Ratings last week. The rating service evaluated Citadel as a lender and servicer, assigning it level-three rankings on a scale of one to four, with four being the worst. The assessment, along with a similar assessment by Fitch Ratings earlier this year, show that Citadel is taking steps toward issuing rated nonprime MBS. Sources close to ...