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Volume 2018 - Number 8

April 20, 2018

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Jumbo MBS Underwriting Holds Steady, Banks Remain Top Contributors in 1Q18

Issuance of prime jumbo mortgage-backed securities is on the rise but underwriting standards for loans in the deals aren’t changing much, according to a new analysis by Inside Nonconforming Markets. Some $4.23 billion of prime jumbo MBS was issued in the first quarter of 2018, the highest quarterly volume for the sector since the first three months of 2015. Issuers in the sector have largely maintained super-prime underwriting standards since the financial crisis ... [Includes two data charts]

Chimera, Chase, Redwood Plan New MBS

Chimera Investment, JPMorgan Chase and Redwood Trust plan to issue new prime non-agency mortgage-backed securities in the coming weeks, adding to momentum in a market where most issuers are optimistic about production volume. The planned CIM Trust 2018-J1 would mark a return to the jumbo MBS market for Chimera. The real estate investment trust has focused its issuance efforts on seasoned mortgages in recent years after dabbling in jumbo MBS around 2012 ...

Mixed Views on Flagstar’s Due Diligence Sampling

Full third-party due diligence reviews were completed on only 20.0 percent of the loans being pooled by Flagstar Bank into a new non-agency mortgage-backed security. Rating services delivered mixed assessments of the due diligence sampling rate, which could set a standard for the market. The $704.1 million Flagstar Mortgage Trust 2018-2 is scheduled to close at the end of the month. DBRS, Fitch Ratings, Kroll Bond Rating Agency and Moody’s Investors Service all ...

SG Capital Partners Obtains Ratings for New Deal

SG Capital Partners is set to issue its first rated nonprime mortgage-backed security after bringing to market some unrated deals in recent years and aggregating loans in a rated nonprime MBS issued by a competitor. Morningstar Credit Ratings and S&P Global Ratings assigned preliminary AAA ratings to the planned $140.1 million SG Residential Mortgage Trust 2018-1 last week. Somewhat unusually, the rating services came up with different figures on the share of non-qualified mortgages ...

Invictus Brings Investment-Property MBS

An affiliate of Invictus Capital Partners is set to issue a unique non-agency mortgage-backed security backed by loans on investor properties that differs from the structure of typical single-family rental deals. Invictus’s Verus Mortgage Capital predominantly focuses on non-qualified mortgages and has issued deals backed by non-QMs along with a sprinkling of mortgages on investment properties. Many other nonprime MBS issuers have brought similar deals. The planned $258.4 million ...

A ‘Bespoke’ Non-Agency MBS from Redwood

Redwood Trust is set to issue a “bespoke” prime non-agency mortgage-backed security. The deal largely looks like other MBS from Redwood, but a spokesperson for the real estate investment trust said the MBS was tailored for one investor. Kroll Bond Rating Agency placed preliminary ratings on the planned $338.7 million Sequoia Mortgage Trust 2018-4 last week. The deal is scheduled to close on April 20. There are only minor differences between the MBS and three other ...

New Lender Focuses on Jumbos, Tech

Eave, a direct-mortgage lender, launched recently with a focus on jumbo mortgages, technology and low fees. The originator, only operating in Colorado at the moment, claims to be able to close loans about twice as fast as “brand name” lenders. “We took the entire mortgage universe apart and put it back together, better,” the firm said, touting its underwriting process. The lender claims that more than 60 percent of the information collected by other lenders from ...

News Briefs

Ron Faris, the current president and CEO of Ocwen Financial, will retire on June 30. After Ocwen’s pending acquisition of PHH Corp. closes, Glen Messina will be president and CEO of Ocwen, the nation’s largest subprime servicer. Messina was previously president and CEO of PHH. During the first quarter of 2018, Wells Fargo sold $1.60 billion of its holdings of vintage pick-a-pay mortgages. The sale generated a gain of $643.0 million for the bank. The buyer ... [Includes four briefs]

Average Jumbo Mortgage Interest Rates and Mortgage Performance

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

Poll

What’s your opinion on how Mick Mulvaney has managed the CFPB since he took over three months ago?

He’s done a good job of paring back the agency’s excesses and we’d like to see more.

35%

I hope he totally dismantles the agency and sends those functions back to the agencies hence they came.

14%

Not bad, but he needs to take his time making additional changes.

12%

We’re totally aghast. He’s gone way too far in protecting the rights of companies not consumers!

39%