Although there’s been plenty of talk about the securitization of nonprime loans that don’t fit the qualified mortgage criteria finally taking off this year, it’s not looking like a good bet. “We can’t do a security this year,” said Jeff Lemieux, vice president at Bayview Asset Management, which has been actively buying non-QM product geared toward the self-employed. Bayview is purchasing...

Issuance of jumbo MBS and ABS has grown since 2010, but pending Federal Reserve actions regarding interest rates could stop the trend this year, according to industry analysts. The Fed is expected by many to increase interest rates for the first time in years, perhaps as soon as the end of the second quarter of 2015. Standard & Poor’s warned last week that interest rate hikes could threaten the still-rebounding structured finance market. “The Fed’s normalization of monetary policy could create...

If issuers were to include agency-eligible mortgages with slightly less than pristine underwriting standards in new non-agency mortgage-backed securities, the deals could receive ratings with credit enhancement levels similar to the levels on recent jumbo MBS, according to the results of an exercise released this week by the Treasury Department. Treasury asked six rating services to assign ratings to hypothetical non-agency MBS comprised of $19.75 billion of mortgages ...

One year after the Consumer Financial Protection Bureau’s standards for qualified mortgages took effect, lenders remain cautious about originating non-QMs. “Even though DBRS has seen a few lenders implementing non-QM programs that allow for back-end debt-to-income ratios as high as 50 percent and FICO scores as low as 600, DBRS expects that larger lenders, who are still recovering from the massive fines they had to pay for making subprime loans, will ...

A larger share of small portfolio lenders would qualify for exemptions from standards for qualified mortgages under a proposal issued last week by the Consumer Financial Protection Bureau. Among other issues, the CFPB proposed expanding the definition of “small creditor” from the current limit of 500 first-lien mortgages originated in a year to 2,000 mortgages. The new definition would exclude loans held in portfolio by the lender and its affiliates ...

The Consumer Financial Protection Bureau made a few industry hearts skip a beat last week when it proposed loosening some of the parameters of the ability-to-repay rule for small lenders and for those providing credit to rural and underserved communities. Under the bureau’s proposal, small lenders could hold an unlimited number of mortgages in portfolio without sacrificing their “small creditor” status under the ATR rule. In and of itself, the change isn’t that big a deal. But what really captured some industry representatives’ imagination was the possibility that it might represent a liberalization of the bureau’s attitude toward portfolio loans in the context of the ATR rule and more concessions ahead. Under the CFPB’s proposal, the definition of “small creditor” would expand...

Seven of the 10 largest servicers participating in the Home Affordable Modification Program were unable to process the number of HAMP modification applications they received in November, according to the Special Inspector General for the Troubled Asset Relief Program. SIGTARP first raised concerns about servicers’ slow processing of HAMP mods in September. In a report released last week, the SIGTARP took the Treasury Department to task for not doing enough to address the issue. “Treasury must ensure...

The recent dip in interest rates has sellers of mortgage servicing rights questioning whether they should sell into a market of weakening prices or hang on until values firm up. As always, the answer depends on what type of servicing rights a seller is looking to unload in a market where the yield on the benchmark 10-year Treasury is once again nearing its low for the year. With rates low on current production, prices are...

Wells Fargo and JPMorgan Chase reached a financial settlement with the Consumer Financial Protection Bureau and the Maryland attorney general last week over allegations related to illegal mortgage kickbacks involving some of their loan officers and Genuine Title, a title company based inMaryland that went out of business last spring. The two government agencies are seeking civil penalties of $24 million from Wells Fargo and $600,000 from JPMorgan Chase. They also want $10.8 million from Wells and $300,000 from JPMorgan Chase in redress for consumers whose loans were involved in the marketing arrangement at issue. The CFPB and the Maryland AG also took action...

Wells Fargo and JPMorgan Chase settled with the CFPB and the Maryland Attorney General last week, resolving allegations of participating in an illegal marketing kickback scheme with Genuine Title, a title company that has since gone out of business. The government agencies alleged that Genuine Title gave the banks’ loan officers cash, marketing materials and consumer information in exchange for business referrals. The CFPB and the Maryland AG also took action against former Wells Fargo employee Todd Cohen and his wife, Elaine Oliphant Cohen, both of Baltimore, for their alleged involvement. The two government agencies are seeking $24 million in civil penalties from Wells Fargo and $600,000 in civil penalties from JPMorgan Chase. They also want $10.8 million from Wells ...