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Inside Nonconforming Markets

July 13, 2018

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Non-Agency MBS Issuance Backed by New Production Hits Another Quarterly Record

Issuance of non-agency mortgage-backed securities reached a third straight post-crisis quarterly record during the recently completed April-June cycle, according to a new ranking and analysis by Inside Nonconforming Markets. A total of $10.03 billion of non-agency MBS backed by new jumbo and expanded-credt originations was issued in the second quarter. The previous quarterly record was $6.28 billion in the first quarter of 2018. And in ... [Includes one data chart] Read More

Fitch Flags R&W from Issuers It Doesn’t Rate

A handful of issuers of non-agency mortgage-backed securities not rated by Fitch Ratings were called out in a report by the rating service regarding representations and warranties. The report released at the end of June detailed how reps, warrants and enforcement provisions for various issuers compare with a “full” rep-and-warrant framework established by Fitch. The rating service includes an assessment of reps and warrants for all of the non-agency MBS the firm rates but the report also ... Read More

Verus Goes Big with Nonprime MBS

An affiliate of Verus Mortgage Capital is set to issue what will be the largest post-crisis nonprime MBS to date. The planned $489.6 million issuance will top a $426.2 million deal issued by Lone Star Funds in September. The types of mortgages in the latest Verus MBS are similar to those in a $249.0 million deal the firm issued in January, though the average loan balance in the new MBS is somewhat larger. Mortgages in the new deal have an average unpaid principal balance of ... Read More

Redwood Brings Smaller Expanded-Prime MBS

Redwood Trust is preparing to issue an expanded-prime mortgage-backed security that will be somewhat smaller than others issued by the real estate investment trust. Sequoia Mortgage Trust 2018-CH3 will be a $417.0 million issuance, according to a presale report by Kroll Bond Rating Agency. In May, Redwood issued a $520.5 million expanded-prime deal and the firm issued a $444.3 million MBS in February. Mortgages in the deals are largely similar and the pending issuance has ... Read More

Higher-Priced Lending Up by 20.1 Percent in 2017

Originations of higher-priced conventional mortgages increased by 20.1 percent on an annual basis to $36.01 billion in 2017, according to a new ranking and analysis by Inside Nonconforming Markets of data from the Home Mortgage Disclosure Act. Higher-priced mortgages are loans that have an annual percentage rate higher than a threshold for the “average prime offer rate” on a comparable mortgage. First-lien mortgages with an APR ... [Includes two data charts] Read More

MBA Pushes CFPB for Non-Agency Help

In a recent comment letter submitted to the Consumer Financial Protection Bureau, the Mortgage Bankers Association argued for changes to regulations in an effort to boost originations of non-agency mortgages. The trade group cited problems with Appendix Q of the ability-to-repay rule and called for the government-sponsored enterprise “patch” for qualified mortgages to be extended to jumbo mortgages. Appendix Q sets QM standards for non-agency mortgages that aren’t eligible for sale to the GSEs or government-insured Read More

Reg Relief to Cause a Cascade of Looser Standards?

A provision involving community banks and qualified mortgages in recently enacted regulatory relief legislation could prompt community banks and nonbanks to loosen underwriting standards for non-agency mortgages, according to Moody’s Investors Service. Banks with less than $10.0 billion in assets can receive QM treatment for certain loans that would otherwise be non-QMs if the banks hold the mortgages in portfolio acording to the Economic Growth, Regulatory Relief and ... Read More

News Briefs

Borrower complaints about nontraditional mortgage products from nonbanks in California decreased in 2017, according to the state’s Department of Business Oversight. The California DBO said nonbank lenders and servicers received 12,963 complaints about nontraditional mortgages, down 11.1 percent from 2016. However, officials at the DBO cautioned against making comparisons between data for 2016 and 2017 because the number of ... [Includes two briefs] Read More

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