Due partly to the pandemic, which had an outsized negative impact on non-agency lending, the jumbo sector saw its share of overall originations drop to just 9.7% in 2020 from 16.7% in 2019.
A January agreement between the Treasury and FHFA, which places limits on mortgage acquisitions by the GSEs, could send some business to the non-agency market. The limits apply to high-risk mortgages as well as loans for investment properties and second homes. (Includes data chart.)
Jumbo lending increased a scant 2% in the fourth quarter and held steady on an annual basis in 2020. The sector lost a significant amount of market share as agency refi business boomed. (Includes data chart.)
In the span of two days, Chase offered a first-of-its-kind risk-sharing transaction involving non-qualified mortgages and two prime non-agency MBS, including one with a balance of $1.10 billion.
The QM patch was scheduled to end July 1, but the timeline has been delayed as a Biden CFPB considers its options. The bureau might also revoke the newly-created category of seasoned QMs.
The volume of jumbo servicing handled by 30 of the top firms in the sector declined by nearly 6% in 2020. The share of borrowers missing payments is increasing. (Includes data chart.)
The amended preferred stock purchase agreement between the FHFA and Treasury includes limitations on acquisitions of mortgages for investment properties, second homes and products with “high risk” characteristics...
After reducing its non-agency investments amid volatility from the coronavirus, Annaly is ready to ramp up activity in the sector. The REIT is acquiring non-QMs and packaging them into MBS.