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Inside Nonconforming Markets

March 31, 2017

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Prime Non-Agency MBS Bounces Back in Early 2017, Pricing Strong

Issuance of prime non-agency mortgage-backed securities increased by 65.3 percent in the first quarter of 2017 compared with the previous quarter, according to a new ranking and analysis by Inside Nonconforming Markets. Some $2.60 billion in prime non-agency MBS were issued in the first quarter. Volume was boosted by relatively strong demand from investors, the emergence of a new participant and the return of a firm that has largely ... [Includes one data chart] Read More

Conforming Jumbos Could Boost Non-Agency MBS

Lenders originating so-called conforming-jumbo mortgages that are eligible for sale to the government-sponsored enterprises continue to see better execution by delivering those loans to Fannie Mae and Freddie Mac instead of packaging them in non-agency mortgage-backed securities. However, conforming jumbos accounted for 36.3 percent of the $1.03 billion non-agency MBS JPMorgan Chase issued in February. And other banks could follow in placing such ... Read More

Annaly Buying More Whole Loans

Annaly Capital Management is buying more non-agency whole loans, including non-qualified mortgages. The large real estate investment trust is using infrastructure it acquired from Hatteras Financial last year to complete the whole-loan expansion. Annaly’s residential credit group invests in non-agency mortgage assets, including whole loans and mortgage-backed securities. The group had $2.50 billion in assets as of the end of 2016, with whole loans accounting for ... Read More

IO Mortgage Originations Increase in 2016

Originations of interest-only mortgages increased in 2016 compared with the previous year, based on volume from 12 lenders tracked by Inside Nonconforming Markets. The group originated $40.52 billion in IOs during the year, a 36.5 percent increase from the previous year. All but one of the lenders increased their IO production compared with 2015, with many posting gains higher than 50.0 percent. IOs can’t receive qualified-mortgage status ... [Includes one data chart] Read More

Lenders Divided on Portfolio QM Proposal

A proposal in Congress to define all mortgages held in portfolio as qualified mortgages has some bipartisan support, but lenders are divided on the matter. “I caution the use of portfolios to add loans that are not standard,” said David Motley, president of Colonial Companies and chairman-elect of the Mortgage Bankers Association. “The rules of the qualified mortgage, I believe, should be the same for everybody.” He made the remarks this week at a hearing by the ... Read More

Shelter Growth Issues Its Second Nonprime MBS

An affiliate of Shelter Growth Capital Partners issued a $119.87 million mortgage-backed security backed by newly originated nonprime mortgages this week. It’s the second nonprime MBS from SG Capital Partners, following a $113.71 million deal in October. The new issuance is fairly similar to the previous MBS from the firm, including relatively large loan balances and many adjustable-rate mortgages. SG Residential Mortgage Trust 2017-1 included mortgages with an ... Read More

ARM Originations Increase, Market Share Declines

Originations of adjustable-rate mortgages increased in 2016 but didn’t keep pace with the overall growth in mortgage originations during the year, according to a new ranking and analysis by Inside Nonconforming Markets. An estimated $212.0 billion in ARMs were originated last year, up 6.5 percent from 2015. ARMs accounted for 10.3 percent of total originations in 2016, down from an 11.5 percent share the previous year. ARM originations also declined ... [Includes one data chart] Read More

BofA Faces Stiff Penalty for Single Foreclosure

A U.S. bankruptcy fudge slapped Bank of America with $45.0 million in punitive damages last week for its handling of a mortgage foreclosure. “Franz Kafka lives,” Judge Christopher Klein wrote in his opinion, citing the author known for writing about complex or illogical situations. “This case reveals that he works at Bank of America.” The lawsuit, Sundquist v. BofA, centers on a jumbo mortgage originated in 2008 by a broker and acquired by Countrywide Home Loans ... Read More

News Briefs

Ocwen Financial announced that it signed an agreement with the New York State Department of Financial Services this week to terminate the state regulator’s third-party operations monitor at Ocwen on April 14. Ocwen said the agreement provides a path for the nonbank to receive approval from the NYDFS to resume acquiring mortgage servicing rights. The Structured Finance Industry Group is preparing the next phase of its effort to revive the non-agency ... [Includes two briefs] Read More

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