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Inside Nonconforming Markets

December 16, 2016

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SoFi Joins Jumbo MBS Market with Strong Underwriting; Chase Preps Another Deal

Social Finance, a nonbank that started offering mortgages in 2014, is preparing to issue a $168.79 million jumbo mortgage-backed security, according to presale reports. It will be the first jumbo MBS from SoFi, which originated all of the mortgages backing the deal. While SoFi started operations in 2011 as a peer-to-peer or marketplace lender, Fitch Ratings noted that its funding strategy has evolved to more traditional sources, such as banks and other large financial institutions ... Read More

Nonprime MBS from Lone Star Sets Precedents

A new nonprime MBS from an affiliate of Lone Star Funds has two significant distinctions: it’s the first post-crisis nonprime MBS backed by new originations to receive a AAA rating and it’s the largest post-crisis nonprime MBS backed by new originations. COLT 2016-3 Mortgage Loan Trust received AAA ratings from DBRS and Fitch Ratings. “Over the past year, Fitch has become more comfortable with the operational risk of the issuer through extensive due diligence results, multiple ... Read More

SFIG Proposes More Non-Agency MBS Reforms

The Structured Finance Industry Group released the fifth edition of its RMBS 3.0 green papers last week, featuring a draft deal-agent agreement and proposed bondholder-communication protocols. The green paper effort to revive the non-agency mortgage-backed securities market started in 2013 and now totals 400 pages. “That’s a lot of work for an industry that apparently doesn’t exist,” Richard Johns, SFIG’s executive director, said last week at the trade group’s annual ... Read More

Proposals Not Enough to Revive Non-Agency MBS

Proposals aimed at reviving the issuance of non-agency mortgage-backed securities have done little thus far to get volumes anywhere near the levels seen before the financial crisis. Industry participants suggest that there are a number of factors beyond proposed standards from trade groups that are limiting issuance. The American Securitization Forum started its effort to revive the non-agency mortgage-backed security market in 2009. The first post-crisis jumbo MBS backed by newly originated ... Read More

ARM Originations Increase in 3Q, More Expected

Originations of adjustable-rate mortgages increased by 9.4 percent in the third quarter of 2016, according to a new ranking and analysis by Inside Nonconforming Markets. With an increase to interest rates on mortgages seen this quarter and even higher rates expected, ARMs appear likely to gain market share. An estimated $58.0 billion in ARMs were originated in the third quarter, accounting for 9.9 percent of first-lien originations, according to Inside Mortgage Finance ... [Includes one data chart] Read More

IO Originations Falter for Some in 3Q

Lenders originating interest-only mortgages showed divergent trends in the third quarter, with some posting significant declines on a quarterly basis while others continued to increase production. A group of 12 lenders tracked by Inside Nonconforming Markets originated a total of $9.64 billion in IOs during the third quarter, down 23.7 percent from the previous quarter. The decline was driven by PHH Mortgage, whose IO originations through three quarters this year ... [Includes one data chart] Read More

Broker Jumbo Production Down in 3Q16

Mortgage brokers played a somewhat diminished role in jumbo mortgage originations during the third quarter, according to an exclusive Inside Nonconforming Markets analysis and jumbo lender profile. Survey data from Inside Mortgage Finance show that brokers were responsible for just 3.9 percent of jumbo originations in the third quarter, down from 4.5 percent in the previous period. The retail (79.8 percent) and correspondent (16.3 percent) shares were ... [Includes one data chart] Read More

News Brief

Royce Goldman, a marketing lead generator, noted that as interest rates rise, the firm can help connect lenders that originate non-qualified mortgages with borrowers. “As private capital and securitization continue to expand under a more favorable regulatory climate, we will continue to see liquidity expansion but it will require a data driven approach to sourcing the client profile this investor community will lend to,” said John Royce, CEO of Royce Goldman. Read More

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