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Inside Nonconforming Markets

March 14, 2014

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Jumbo Lending Up Sharply in 2013, Driven By Bank Portfolio Appetite

Originations of jumbo mortgages significantly outpaced originations of other first-lien mortgage types in 2013, according to a new ranking and analysis by Inside Nonconforming Markets. Banks continue to dominate the market for jumbos, both with their own originations and via acquisitions of production from lenders that might otherwise have delivered their production to jumbo mortgage-backed security issuers. An estimated $272.0 billion in non-agency jumbos ... [Includes one data chart] Read More

Treasury Pushing for Jumbo MBS Standardization

Investors would be more willing to buy AAA tranches of jumbo mortgage-backed securities if issuers would standardize their offerings, according to Michael Stegman, counselor to the Treasury Department on housing finance policy. While the Treasury and industry participants both currently have initiatives aimed at standardization, issuers haven’t been too willing to seek uniformity. In a speech last week, Stegman said that based on recent meetings with jumbo MBS participants ... Read More

Credit Suisse Taps New Penn for Another Jumbo MBS

Credit Suisse teamed with New Penn Financial to issue another jumbo mortgage-backed security at the end of February, the latest in a unique partnership. The $297.36 million issuance received a AAA rating with credit enhancement of 8.85 percent for the top-rated tranche. Some 13 lenders contributed to the deal, with 74.2 percent of the mortgages originated or acquired by New Penn, according to a final rating report by DBRS (no presale reports were issued). Standard & Poor’s ... Read More

Non-Agency Lenders Adjust to QM, ATR

Two months after the Consumer Financial Protection Bureau’s ability-to-repay requirements took effect, non-agency lenders seem to have adjusted to the rule. The debt-to-income ratio requirements for qualified mortgages do not appear to have prevented many borrowers from obtaining a mortgage and lenders have adjusted their documentation requirements. “To my knowledge we haven’t lost any sales because people didn’t qualify under the QM banner,” said ... Read More

Senate Bill Would Maintain High-Cost Loan Limits

Bipartisan legislation in the Senate to reform the government-sponsored enterprises would maintain the high-cost conforming loan limits, according to a summary of the draft bill released this week. The bill signals a shift as other GSE reform efforts in Congress have contemplated a gradual reduction of high-cost conforming loan limits. Leaders of the Senate Committee on Banking, Housing and Urban Affairs announced this week that they reached an agreement on what will be included ... Read More

NY DFS Targets Nationstar, Nonbank Cooperates

Nationstar Mortgage joined Ocwen Financial last week under the glare of the New York Department of Financial Services’ spotlight. Ben Lawsky, superintendent of the NYDFS, said the state regulator has received hundreds of complaints about Nationstar’s practices, including problems with loan modifications, improper fees and lost paperwork. “Our department has significant concerns that the explosive growth at Nationstar and other nonbank servicers may create capacity issues ... Read More

GSEs Shedding Nonprime Holdings, Earning Profits

Fannie Mae and Freddie Mac sold some nonprime mortgage-backed securities during 2013 even though the government-sponsored enterprises have seen strong returns on these holdings in recent quarters. The GSEs held a total of $84.61 billion in nonprime MBS as of the end of 2013, according to a new analysis by Inside Nonconforming Markets. The holdings declined by 18.2 percent compared with the end of 2012 due to a combination of ... [Includes one data chart] Read More

News Briefs

The Structured Finance Industry Group this week requested a 60-day extension of the comment period for revisions to Regulation AB proposed by the Securities and Exchange Commission. The SEC re-proposed part of its so-called Reg. AB2 rule on Feb. 25 and comments are currently due March 28. Richard Johns, the SFIG’s executive director, said the SEC’s proposed approach for disclosures on non-agency mortgage-backed securities is largely ... [Includes four briefs] Read More

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