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Volume 2017 - Number 15

July 21, 2017

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Flagstar to Issue Jumbo MBS, Joining Chase As the Only Active Bank Issuer in the Market

The jumbo mortgage-backed security market is set for a significant boost as Flagstar Bank will issue MBS. Since 2015, only one bank has issued jumbo MBS: JPMorgan Chase. Other issuers have all been nonbanks as banks have largely opted to retain jumbos in portfolio instead of issue non-agency MBS. Some details about the planned Flagstar Mortgage Trust 2017-1 were revealed this week in documents filed with the Securities and Exchange Commission ...

PIMCO Calls for Non-Agency Reforms

Policymakers should make a number of changes to regulations to entice investors to buy new non-agency mortgage-backed securities, according to officials at Pacific Investment Management Company. PIMCO was a major investor in pre-crisis non-agency MBS. “Unlike the complexities of government-sponsored enterprise reform, a few minor, straightforward changes – some of which can be done through regulation, not legislation – can be made to bring private capital back to the market ...

Wells Sends Mixed Signals on Jumbo IOs

John Shrewsberry, CFO of Wells Fargo, told the bank’s investors last week that Wells is taking some steps to boost mortgage originations, including an emphasis on interest-only loans. “We are making some modest changes to generate new loan originations, including offering interest-only jumbo mortgage loans to high quality borrowers ...,” Shrewsberry said during Wells’ earnings call. However, when asked for further details, Tom Goyda, a spokesperson for Wells, downplayed ...

Fixed-Rate Loans Dominate Non-Agency MBS

Only fixed-rate mortgages were included in prime non-agency mortgage-backed securities issued in the second quarter of 2017, according to an analysis by Inside Nonconforming Markets. It was the third quarterly interval since the first quarter of 2016 that adjustable-rate mortgages and loans with interest-only features were excluded from prime/jumbo MBS. And in the first quarter of 2017, ARMs accounted for less than 1.0 percent of total prime non-agency ... [Includes two data charts]

Redwood Taps First Republic, Quicken for Jumbos

Loans from more than 100 lenders are in the latest jumbo mortgage-backed security from Redwood Trust but most of the lenders contributed such a small volume of loans to the issuance that they weren’t identified by rating services. Only two lenders have consistently provided more than 5.0 percent of the dollar volume in jumbo MBS Redwood has issued this year: First Republic Bank and Quicken Loans. Loans from First Republic account for 19.6 percent of the $485.25 million ...

Invictus Shows Variety with New Nonprime MBS

A new nonprime mortgage-backed security from Invictus Capital Partners varies in some ways from the deal the firm issued in February. Invictus is set to issue the $241.00 million Verus Securitization Trust 2017-2. The deal the firm issued in the first quarter – the first MBS from Invictus – was for $145.02 million. The purchase-mortgage share in the new deal is down sharply compared with the previous MBS from Invictus, at 46.0 percent compared with 68.3 percent. The cash-out refinance ...

Non-Agency Participants Call for More TRID Fixes

The Consumer Financial Protection Bureau needs to do more to address problems with the TILA-RESPA Integrated Disclosure rule, according to participants in the non-agency market. The final rule issued this month by the CFPB was seen as helpful but insufficient. The final rule from the CFPB clarified some issues and formalized some guidance. The Structured Finance Industry Group said uncertainty regarding TRID violations persists. “SFIG applauds the efforts of the CFPB to ...

News Briefs

The $210.45 million mortgage-backed security Angel Oak Capital Advisors issued earlier this month had the tightest execution of any MBS backed by non-qualified mortgages, according to Sreeni Prabhu, Angel Oak’s co-CEO and CIO. “We believe investors like Angel Oak’s vertically integrated issuer model,” Prabhu said. “This is unique in the marketplace and offers them a ‘pure play’ exposure to Angel Oak’s origination and underwriting capabilities.” ... [Includes six briefs]

Average Jumbo Mortgage Interest Rates and Mortgage Performance

A page of jumbo data and the performance of non-agency mortgage-backed securities.

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