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Inside Nonconforming Markets

November 24, 2017

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Jumbo Originations Increase in 3Q17 but Sector Loses Some Market Share

Originations of jumbo mortgages increased in the third quarter of 2017 compared with the previous period, according to a new ranking and analysis by Inside Nonconforming Markets. But through nine months of the year, production was down compared with 2016 and the sector is losing market share as a handful of major lenders are seeing significant declines in their jumbo production. Demand for jumbo mortgages has declined somewhat, according to lenders ... [Includes one data chart] Read More

Starwood Set to Issue MBS Backed by Non-QMs

Starwood Property Trust plans to issue a non-agency mortgage-backed security with non-qualified mortgages in the first quarter of 2018, according to officials at the real estate investment trust. Starwood only recently started acquiring non-QMs, with help from Federal Home Loan Bank advances. Officials said the company acquired $128.0 million of non-agency mortgages in the third quarter, bringing the REIT’s portfolio of such loans to $419.0 million. Jeffrey DiModica, Starwood’s ... Read More

Chase Brings Variety to its Latest Non-Agency MBS

A new, somewhat atypical, non-agency mortgage-backed security from JPMorgan Chase includes a large share of non-qualified mortgages and no fixed-rate mortgages. JPMorgan Mortgage Trust 2017-5 is a $671.7 million deal that received preliminary AAA ratings last week from Fitch Ratings, Kroll Bond Rating Agency and Moody’s Investors Service. The first four deals from Chase this year largely stuck with QMs and included a fair amount of mortgages eligible for sale to the ... Read More

Expanded-Credit Production Level in 3Q

Originations of so-called expanded-credit mortgages among a group of 15 lenders were essentially level in the third quarter of 2017 compared with the previous quarter, according to a new ranking and analysis by Inside Nonconforming Markets. The lenders had a total of $10.61 billion of expanded-credit volume in the third quarter, up 1.7 percent from the previous quarter. Expanded-credit loans include non-qualified mortgages, nonprime mortgages ... [Includes one data chart] Read More

New Nonprime MBS from Angel Oak, Invictus

Issuance of nonprime mortgage-backed securities picked up in November with new deals from Angel Oak Capital Advisors and Invictus Capital Partners. A $210.2 million MBS from Angel Oak is scheduled to close on Nov. 28 and a $253.1 million deal from Invictus closed last week. The deal from Angel Oak is the third nonprime MBS of the year from the firm and follows closely after a nonprime MBS from Deephaven Mortgage where Angel Oak contributed mortgages with an unpaid ... Read More

Banc of California Focusing on Jumbo Non-QMs

California is a jumbo mortgage gold mine that’s dominated by banks, giving Banc of California an enviable starting point. BoC is also differentiating itself by focusing on non-qualified mortgages and avoiding the retail channel. BoC contributed $122.9 million of jumbo loans to a new mortgage-backed security from JPMorgan Chase. Selling loans into the securitization market is a significant shift for BoC, which had previously only contributed eight mortgages to a jumbo MBS issued in 2014 ... Read More

Consumer Advocates Criticize FHLBank Financing

Consumer advocates are pushing for changes that could impact the non-agency market, including raising concerns about the use of Federal Home Loan Bank advances and calling for revisions to standards for qualified mortgages. In a letter this month to the Federal Housing Finance Agency, a group of 136 consumer advocates were critical of Starwood Property Trust’s recently disclosed use of FHLBank advances to fund acquisitions of non-QMs. Starwood is a real estate investment ... Read More

News Briefs

Underwriting standards for subprime mortgages tightened somewhat in the third quarter, according to a survey by the Federal Reserve. One of the four banks surveyed by the Fed reported tightening underwriting standards for subprime mortgages in the third quarter while standards at the other three banks were unchanged compared with the previous quarter.The bankruptcy of the parent company of Ditech Financial is unlikely to have an impact on ... [Includes two briefs] Read More

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