Most of the non-agency MBS on offer within the past two weeks was stocked with mortgages for investment properties.

First Republic Bank is working to increase its share of jumbo originations, using a combination of customer service and low interest rates.

Six expanded-credit MBS started marketing within the past two weeks and there are also offerings of prime jumbos, HELOCs and even a credit-risk transfer deal from Santander Bank.

Wells Fargo was a major player in the jumbo correspondent channel, with a nearly 20% market share. A handful of banks have a strong presence in this category, while nonbank competitors have faced hurdles.

Non-agency MBS issuance perked up in early January as investor demand improved. Redwood Trust offered a jumbo MBS after a year-long lull in issuance and expanded-credit MBS issuers priced deals at tightening spreads.

Redwood raises funds through sale of preferred stock; lender focusing on non-QMs has national aspirations; new DSCR tool for borrowers.

Production of jumbo mortgages in all three channels was down from the second quarter, but correspondents posted a relatively smaller decline than retail producers and brokers. (Includes data chart.)

United Wholesale Mortgage is offering prime jumbo borrowers a 2-1 or 1-0 temporary rate buydown.  Meanwhile, A&D Mortgage announced temporary 3-2-1- and 2-1 rate buydowns.

There are still areas in the country where the jumbo market can grow, according to industry analysts. The only concern is if home prices fall as drastically in 2023 as some economists are predicting.

Originations of non-agency jumbo mortgages declined by 34.8% from the second to the third quarter, driven by rising interest rates. The decline in the jumbo sector was largely in line to trends in the mortgage market. (Includes data chart.)