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Inside Nonconforming Markets

July 24, 2015

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Banks Continue to See Benefits of Holding Originations, Including Some Non-Jumbos

Banks with significant portfolio capacity continue to stock up on mortgages because they offer strong returns and can help efforts to cross-sell other products. While most of the mortgages being added to portfolios are jumbos, in some instances banks are retaining conventional mortgages. JPMorgan Chase reported that it added mortgages with a balance of $19.0 billion to its portfolio holdings during the second quarter of 2015. Marianne Lake, chief financial officer at the bank ... Read More

Freddie Issues Senior-Sub ‘Risk-Transfer’ Deal

Freddie Mac priced a risk-sharing transaction this week that’s structured much like a non-agency jumbo mortgage-backed security that has the advantage of the government-sponsored enterprise’s guaranty and oversight of servicing practices. Freddie Mac Whole Loan Securities Trust, Series 2015 SC01, will include $278 million in senior certificates guaranteed by Freddie and approximately $23 million in unguaranteed subordinate certificates. The deal is backed by ... Read More

Nonbanks Top Contributors to 2Q15 Jumbo MBS

Two nonbanks, led by New Penn Financial, were able to outpace First Republic Bank in contributing to jumbo mortgage-backed securities issued in the second quarter of 2015, according to a ranking and analysis by Inside Nonconforming Markets. New Penn was identified as contributing $145.80 million to the $3.11 billion in jumbo MBS issued during the second quarter. Quicken Loans followed with $139.43 million in contributions. First Republic Bank ... [Includes two data charts] Read More

Variety in Lenders’ Interest-Only Products

United Wholesale Mortgage announced this week that it’s offering interest-only mortgages, joining a growing number of banks and nonbanks originating the loans that don’t meet standards for qualified mortgages. Officials at United Wholesale noted a distinction in the lender’s IO product: “Large banking institutions have widely offered this option, but mostly restricted its availability to jumbo borrowers,” United Wholesale said. The lender is offering IOs with ... Read More

Mixed Disclosure on Chase’s New Jumbo MBS

Investors interested in the jumbo mortgage-backed security from JPMorgan Chase that’s set to be issued next week received new disclosures with sometimes confusing information thanks to a rule from the Securities and Exchange Commission. JPMorgan Mortgage Trust 2015-4 will have a balance of $388.34 million, according to presale reports published last week by Kroll Bond Rating Agency and Moody’s Investors Service. A week before the presale reports ... Read More

Support for FHFA’s Plan on Loan Limits

Industry participants largely support a plan from the Federal Housing Finance Agency for adjustments to the conforming loan limit. The $417,000 loan limit applicable to the government-sponsored enterprises could be increased as soon as January, depending on house-price appreciation trends over the next few months. The FHFA’s proposal said the regulator planned to use the “expanded data” house price index that the agency has published since 2011 to ... Read More

Hatteras Plans to Issue Jumbo MBS by Year-End

Hatteras Financial has ramped up its efforts to acquire jumbo mortgages and plans to issue a jumbo mortgage-backed security before the end of the year, according to officials at the real estate investment trust. “Our portfolio plus commitments of jumbo [adjustable-rate mortgages] today is estimated to be about $258 million, so we’re making progress and nearing scale where we can consider securitization,” Benjamin Hough, Hatteras’ president and COO, said this week ... Read More

CFPB Considers Changes to Income Documentation

The Consumer Financial Protection Bureau is considering revising income documentation standards to help borrowers that have nontraditional sources of income, according to Richard Cordray, the director of the agency. At a hearing last week by the Senate Committee on Banking, Housing and Urban Affairs, Sen. Mark Warner, D-VA, raised concerns about the income documentation standards included in Appendix Q of the CFPB’s ability-to-repay rule. Non-agency lenders ... Read More

News Briefs

Parkside Lending recently “re-introduced” a non-qualified-mortgage product aimed at financing for investment properties. The lender said the “new and improved” Parkside Collateral Loan is available via the wholesale channel. Parkside said there is no borrower-related debt-to-income ratio calculation for the product. Instead, qualification is based on the property DTI ratio with a maximum of 90 percent. The loan allows for credit scores as low as ... [Includes three briefs] Read More

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