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Volume 2018 - Number 16

August 10, 2018

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New Players Enter Non-QM Market by Aggregating Loans and Issuing MBS

More competition is coming into the nascent business of aggregating non-qualified mortgages and issuing mortgage-backed securities drawn by the market’s potential for profitable growth.

ARMs More Prevalent in Expanded-Credit MBS

The majority of loans in expanded-credit mortgage-backed securities are adjustable-rate mortgages, while such loans are few and far between in prime non-agency MBS, according to a new analysis by Inside Nonconforming Markets. [Includes one data chart.]

Lenders Roll Out New Non-Agency Products

A number of lenders have introduced new non-agency products in recent weeks, with an emphasis on expanded-credit jumbo mortgages.

Redwood Earnings Weaken in Second Quarter

Redwood Trust, which helped pioneer the return of the jumbo mortgage-backed securities market earlier in the decade, reported net earnings of $33.0 million for the second quarter, down 29.7 percent from the previous period.

Another Strong Non-QM Quarter for Citadel

Citadel Servicing Corp., Irvine, CA, originated $389.3 million of non-qualified mortgages during the second quarter, a 32.3 percent sequential gain, according to figures the company provided to Inside Nonconforming Markets this week.

Foreclosures on Jumbos Can Prompt Large Losses

Some post-crisis jumbo mortgages that experienced a foreclosure or other liquidation led to large losses even though the properties experienced significant home-price appreciation, according to an analysis by Kroll Bond Rating Agency.

loanDepot Receives ‘Average’ Assessment

loanDepot is an “average” originator of prime jumbo mortgages and loans eligible for sale to the government-sponsored enterprises, according to Moody’s Investors Service.

Accounting Thumps 2Q18 Earnings at Impac

Accounting issues related to a prior acquistion led to a $97.4 million net loss for the second quarter at Impac Holdings, the nonbank reported this week. Despite significant challenges in the market, the company managed to boost its production of home loans that don’t meet the qualified-mortgage standard.

Vintage GSE Nonprime Holdings Run Off

The government-sponsored enterprises’ holdings of vintage nonprime mortgages continued a gradual decline during the second quarter of 2018, according to a new analysis by Inside Nonconforming Markets. [Includes one data chart.]

News Briefs

The first prime jumbo mortgage-backed security to be issued in the third quarter of 2018 won’t close until more than a third of the way through the quarter. Redwood Trust is set to issue a $329.7 million deal, which is somewhat smaller than other prime jumbo MBS from Redwood this year.

Average Jumbo Mortgage Interest Rates and Mortgage Performance August 10, 2018

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


With mortgage production down noticeably this year from 2017, how many lenders might disappear via M&A or failure during the next 12 months?

10% or less. It’s not that bad out there.


11% to 25%. It’s a challenging market.


25% to 40%. It’s going to be very ugly.


No opinion.