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Inside Nonconforming Markets

April 3, 2015

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Jumbo MBS Issuance Hits Post-Crisis High in First Quarter of 2015 Led By JPMorgan Chase

Some $4.60 billion in jumbo mortgage-backed securities were issued in the first quarter of 2015, the highest quarterly volume seen in the aftermath of the financial crisis, according to Inside Nonconforming Markets. Jumbo MBS activity has had large swings in recent years due to shifting investor appetite and volume hasn’t been anywhere near the levels seen before 2008. However, the market recovered from an unexpected increase in interest rates ... [Includes one data chart] Read More

Chase’s Jumbo MBS Conduit Rated Above Average

JPMorgan Mortgage Acquisition Corp. is an “above average” aggregator of jumbo mortgages, according to a rating issued last week by Moody’s Investors Service. “JPMMAC’s strengths include the financial strength of its parent company and extensive controls which ensure consistent production quality,” the rating service said. Chase’s jumbo conduit operation buys closed loans from approved sellers and doesn’t originate mortgages. Of the approximately 9,800 jumbos ... Read More

State Regulators Propose Servicing Standards

Nonbank servicers would be subject to increased capital requirements and scrutiny under standards proposed last week by state regulators. Many parts of the proposal are similar to standards established by federal regulators, though there are some nuances for non-agency mortgages. “By relying upon existing standards and generally accepted business practices, we hope to minimize regulatory burden for small, less complex firms, while still incorporating a ... Read More

Impac Expects Strong Growth from Non-QMs

Originations of loans that don’t meet standards for qualified mortgages have been off to a slow start but officials at Impac Mortgage Holdings suggest that non-QM lending is poised for growth. Joseph Tomkinson, Impac’s chairman and CEO, said the government-sponsored enterprises’ dominance of mortgage originations has limited non-QM originations. “We knew going into this that it would be a slow growth,” he said this week during a call with investors ... Read More

Little Change in Bank and Thrift HEL Holdings

Home-equity loan holdings by banks and thrifts have largely held steady in terms of performance while declining slightly in balance during the past year, according to the Inside Mortgage Finance Bank Mortgage Database. Banks and thrifts held $982.99 billion in home-equity lines of credit, HELOC commitments and closed-end second liens as of the end of the fourth quarter of 2014. The holdings declined by 0.8 percent compared with the previous quarter ... [Includes one data chart] Read More

Supreme Court Considers Second-Lien Write-Offs

Last week, the Supreme Court heard oral arguments on two cases that could have significant ramifications for how second liens are handled when a borrower has negative equity. Both of the cases involve Bank of America arguing on behalf of second-lien lenders and holders. “The Supreme Court’s resolution of the BofA v. Caulkett and BofA v. Toledo-Cardona will either ratify the trend of other circuits, which would benefit junior lenders, or overturn it, which would favor homeowners and first-lien mortgagees,” according to lawyers at ... Read More

Principal Reduction Mods Less Frequent

Large bank servicers significantly reduced their use of principal reduction loan modifications in the past year, according to new data from the Office of the Comptroller of the Currency. Principal reduction mods – which are largely limited to non-agency mortgages – were used in 6.5 percent of the loan mods completed in the fourth quarter of 2014 by eight large bank servicers tracked by the OCC. In the fourth quarter of 2013, large bank servicers employed principal reduction on ... Read More

News Briefs

Non-qualified-mortgages accounted for 1.8 percent of mortgages originated in the fourth quarter of 2014 by 22 lenders surveyed by the National Association of Realtors. NAR noted that most of the lenders in the survey don’t portfolio their originations, which could skew the non-QM share significantly lower compared with lenders that hold non-QMs in portfolio. Some 5.0 percent of originations by lenders surveyed by NAR in the third quarter of 2014 were non-QMs ... [Includes three briefs] Read More

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