JPMorgan Chase is preparing to issue a $1.02 billion non-agency mortgage-backed security with jumbo mortgages along with loans eligible for sale to the government-sponsored enterprises. JPMorgan Mortgage Trust 2017-2 received preliminary AAA ratings last week from Kroll Bond Rating Agency and Moody’s Investors Service. The deal will be the second-largest non-agency MBS backed by post-crisis originations, topped only by the $1.03 billion security Chase issued in ...

Five Oaks Investment shut down its jumbo conduit operations but is still involved in the sector by providing a backstop to representations and warranties on jumbos originated by other lenders. The real estate investment trust is backstopping reps and warrants for mortgages sold on a loan exchange operated by MAXEX. “In July 2016, the company announced that it would no longer aggregate and securitize residential mortgage loans; however, given Five Oaks Acquisition ...

Participants in the non-agency mortgage-backed security market and banks have proposed different ways of how to address debt-to-income ratio standards for qualified mortgages. The Structured Finance Industry Group wants the Consumer Financial Protection Bureau to consider speeding the timeline for ending the so-called QM patch, while the American Bankers Association seeks a permanent fix for the DTI issue. The debate centers on the 43.0 percent DTI ratio standard for QMs ...

Data regarding subprime mortgages outstanding, delinquencies and loss mitigation activity are getting more difficult to track as the market has essentially been in runoff mode since 2009.Few servicers report on their subprime portfolios, a key delinquency data series was recently discontinued and details on loan modifications are lagging. Some $247.0 billion of subprime mortgages were outstanding as of the end of the first quarter of 2017 ... [Includes one data chart]

Credit Suisse is preparing to issue a $91.18 million non-agency mortgage-backed security backed by seasoned FHA mortgages, according to a presale report by Moody’s Investors Service. CSMC Trust, Series 2017-FHA1 received a preliminary A1 rating. Credit Suisse was a major issuer of post-crisis jumbo MBS but hasn’t issued a jumbo MBS since the fourth quarter of 2015. Fitch Ratings completed a review this week of 63 non-agency MBS backed by post-crisis originations ...

The non-agency MBS market is set to receive a jolt as Wells Fargo plans to return to the space. “This year, one of our aspirations is to come back to the market with a couple of deals,” said Franklin Codel, a senior executive vice president of consumer lending at Wells. “We’re taking a look to make sure we can structure those properly … to try to test the market and see what we can do to bring some confidence back to the private-label market.” The official mentioned the plans late last week during an investor event hosted by Wells. Back in 2007, Wells ranked...

Industry attorneys are warning about a “third wave” of Lehman Brothers Holdings (LBHI) MBS trust claims against mortgage lenders and brokers based on the firm’s latest bankruptcy filing. Attorneys with the firm American Mortgage Law Group said Lehman Brothers for several years has been threatening to file residential MBS trust claims against the mortgage industry to counter trustee claims filed against LBHI in bankruptcy in 2009. The wait is...

Originations of non-agency jumbo mortgages in the first quarter of 2017 were down by 29.0 percent from the previous quarter, according to a new ranking and analysis by Inside Nonconforming Markets. A decline in refinance activity contributed to the sharp drop in jumbo funding. An estimated $71.00 billion of non-agency jumbos were originated during the quarter. Not only did volume fall significantly from the fourth quarter of 2016, production was ... [Includes one data chart]

Redwood Trust posted $37.0 million of net income in the first quarter of 2017, up 45.8 percent from the previous quarter and more than double the net income the real estate investment trust reported for the first quarter of 2016. Income from Redwood’s mortgage-banking activities was boosted by higher loan purchase volume and strong demand in the secondary market for jumbo mortgages. Redwood purchased jumbo mortgages with a total unpaid principal balance of ...

Impac Mortgage Holdings has significantly increased its originations of non-qualified mortgages and plans to package the loans into non-agency mortgage-backed securities. The nonbank originated $184.3 million of non-QMs in the first quarter of 2017, up from $86.3 million in the previous period. In all of 2016, Impac originated $289.6 million in non-QMs. The product accounted for 11.6 percent of Impac’s originations in the first quarter, up from a 2.8 percent share the previous period ...