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Inside Nonconforming Markets

November 30, 2018

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Correspondent Channel Gains More Market Share of Jumbo Originations in Third Quarter

The correspondent channel has continued to gain market share of jumbo mortgages as production of such loans has shifted to purchase financing, according to a new analysis by Inside Nonconforming Markets. Correspondents accounted for 21.7 percent of third-quarter jumbo mortgages originated by lenders that report data to Inside Mortgage Finance. The sector’s market share has increased for three consecutive quarters. Correspondents accounted... [Includes one data chart] Read More

Conforming Loan Limits Increase 6.9% in 2019

The threshold for what constitutes a jumbo mortgage will increase by 6.9 percent in 2019 as the Federal Housing Finance Agency set new loan limits this week. The baseline conforming loan limit for the government-sponsored enterprises will increase to $484,350 from $453,100 in 2018, and for most high-cost areas, the limit will rise to $726,525 from $679,650. The FHFA annually adjusts loan limits for mortgages delivered to Fannie Mae and Freddie Mac based on its home price index ... Read More

Jumbo Servicing Portfolios Largely Increasing

Most major servicers of jumbo mortgages increased their portfolios in the third quarter, according to a new ranking and analysis by Inside Nonconforming Markets. Combined, 30 servicers handled an estimated $1.06 trillion of jumbo mortgages as of the end of September, up 2.7 percent sequentially and 10.7 percent from a year ago. Only four of the servicers posted lower jumbo portfolios on an annual basis, and one of the firms, Ocwen Financial, is under ... [Includes one data chart] Read More

Lenders Decrease Premiums on Non-QMs

The spread between interest rates for qualified mortgages and similar non-QMs has narrowed somewhat this year. The lower premium placed on non-QMs suggests that lenders are getting more comfortable with the liability associated with the loans. The findings were detailed recently by two economists at the Federal Reserve who had access to loan-level data from Optimal Blue. The data comprised loan applications and mortgage locks from January 2013 through September 2018 ... Read More

Citadel Boosts Portfolio; Ocwen Eyeing Growth

Among the top 15 servicers of subprime mortgages, only one grew its portfolio over the 12 months prior to the end of September, according to a new ranking and analysis by Inside Nonconforming Markets. The increase was posted by Citadel Servicing Corp., which is boosting its portfolio with originations of nonprime mortgages. Citadel handled a subprime portfolio with an unpaid principal balance of $1.80 billion as of September-end. The portfolio grew ... [Includes one data chart] Read More

Multiple Factors Boosting Non-Agency MBS Prices

The strong demand for non-agency mortgage-backed securities this year looks to be tied to a number of factors, according to industry analysts. ICE Data Services, a firm that tracks non-agency MBS prices, noted that the sector has been helped by large settlements involving legacy non-agency MBS. And investors are more comfortable with the legal liability associated with non-qualified mortgages, prompting significant securitization of the loans. Issuers are also experimenting with ... Read More

Regulators Propose Higher Appraisal Threshold

Federal regulators last week proposed a significant expansion in the number of non-agency mortgages that will not need a full appraisal. Currently, non-agency mortgages with loan balances of less than $250,000 don’t need an appraisal if originated by a bank. The regulators proposed increasing the threshold to $400,000. Mortgages below the appraisal threshold still require an evaluation, just not a full appraisal. Banking regulators said the proposal is an effort to reduce ... Read More

Many Cash-Out Refis in Investment Property MBS

An affiliate of American Mortgage Investment Partners Management plans to issue a non-agency mortgage-backed security with a high share of cash-out refinances on investment properties. Some 70.2 percent of the mortgages in the $199.5 million RCO 2018-VFS1 Trust are cash-out refis while 16.0 percent were to purchase an investment property. All of the loans were originated by Visio Financial Services, a lender that started producing mortgages in September 2015 ... Read More

News Briefs

Two mortgage-backed securities with non-qualified mortgages originated by Impac Mortgage Holdings are in the works, according to presale reports released last week. An affiliate of Starwood Capital Group plans to issue a $280.0 million MBS with loans solely originated by Impac, while Deephaven Mortgage plans to issue a $374.3 million deal with production from 77 lenders, led by Impac with a 14.7 percent share. Among nine mortgage-backed securities ... [Includes two briefs] Read More

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