Nonconforming

Browse articles from all of our Newsletters related to Nonconforming.

August 18, 2017 - Inside Nonconforming Markets

Average Jumbo Mortgage Interest Rates and Mortgage Performance

A page of jumbo data and the performance of non-agency mortgage-backed securities.


August 18, 2017 - Inside Nonconforming Markets

News Briefs

Citadel Servicing Corp. recently launched a one-month bank-statement program for self-employed borrowers. While some lenders offer bank-statement programs, borrowers are typically required to provide at least one year of documentation. Citadel stressed that deposits into the borrower’s bank account aren’t the determinant figure to verify income. “Income is attested to and declared [by the borrower], a Citadel underwriter will confirm that ... [Includes three briefs]


August 18, 2017 - Inside Nonconforming Markets

Bill Would Reduce Appraisal Standards for Some

Legislation being pushed by Republicans in Congress would reduce appraisal requirements for a unique set of mortgages: those with balances of $250,000 or less that are held in portfolio for three years. Supporters of the legislation claim the carve-out will help first-time homebuyers and lenders in rural areas, while consumer advocates caution that the proposal could lead to practices similar to those that contributed to the financial crisis. H.R. 3221, the Securing Access to Affordable Mortgage Act ...


August 18, 2017 - Inside Nonconforming Markets

Chase, Wells Call for Changes to ATR Rule

The Consumer Financial Protection Bureau’s planned review of the ability-to-repay rule prompted comment letters from trade groups representing various industry participants along with individual comment letters from JPMorgan Chase and Wells Fargo. The big banks were critical of certain aspects of the ATR rule and requested changes that could increase originations of non-agency mortgages. “The ATR/qualified mortgage rule is not working as desired,” said Michael Weinbach, a ...


August 18, 2017 - Inside Nonconforming Markets

Ellington, Impac Hungry for More Non-QMs

Two nonbanks involved in originating and acquiring non-qualified mortgages aren’t satisfied with the amount of volume they have taken in thus far. “We like our portfolio, but we wish it would ramp faster,” Mark Tecotzky, co-chief investment officer at Ellington Financial, said during the company’s earnings call for the second quarter. Ellington has made an equity investment in an unidentified lender and as of the end of the second quarter was holding non-QMs with an unpaid principal balance of ...


August 18, 2017 - Inside Nonconforming Markets

Regular Issuance Continues for Chase, Redwood

JPMorgan Chase and Redwood Trust are set to continue their regular issuance of non-agency mortgage-backed securities, with deals scheduled to close on Aug. 30. The planned JPMorgan Mortgage Trust 2017-3 is a $1.02 billion deal, while Sequoia Mortgage Trust 2017-6 is sized at $355.4 million. Both of the MBS are predominantly backed by non-agency jumbo mortgages along with some loans eligible for sale to the government-sponsored enterprises. Rating services ...


August 18, 2017 - Inside Nonconforming Markets

Starwood to Acquire Non-QMs with FHLBank Help

Officials at Starwood Property Trust announced last week that the company will acquire non-qualified mortgages with funding provided by new membership in the Federal Home Loan Bank system. Starwood is a real estate investment trust that has traditionally focused on commercial mortgages. Starwood said it gained membership in the FHLBank of Chicago shortly after the end of the second quarter of 2017. Jeffrey DiModica, president of Starwood, said the REIT will ...


August 18, 2017 - Inside Nonconforming Markets

Nonconforming Originations Hit $7.0 Billion

Originations of nonconforming mortgages are increasing as lenders get more comfortable with the loans and seek to maintain production levels. Some $7.0 billion in nonconforming mortgages were originated in the second quarter of 2017, according to estimates by Inside Nonconforming Markets. The category includes nonprime loans, mortgages that don’t meet the qualified-mortgage test and other non-agency products, but it excludes prime jumbo loans. In our surveys ... [Includes one data chart]


August 18, 2017 - Inside Nonconforming Markets

Jumbo Origination Volume Increases In 2Q17, Still Off of Pace Set Last Year

Originations of non-agency jumbo mortgages increased in the second quarter of 2017, according to a new ranking and analysis by Inside Nonconforming Markets. But halfway through 2017, volume is lagging the production seen last year. An estimated $83.0 billion of non-agency jumbos were originated in the second quarter, up 18.6 percent from the previous period. In the first half of 2017, an estimated $153.0 billion of jumbos were originated, down ... [Includes one data chart]


August 18, 2017 - IMFnews

What We’re Hearing: The Nation’s Volume Leader in the ‘New’ Nonconforming Is… / Sales Executive Departs / Don’t Stop Believin’ (in Fannie and Freddie)? / ‘Contract Law’ and GSE Common Shares / A Legislative Snafu Called Donald Trump?

According to our calculation, Fannie common now trades at $2.80, a 20.17 percent improvement since the close of 2Q17, while Freddie’s value rose 21.08 percent to $2.70.


August 18, 2017 - IMFnews

Those Incredibly Shrinking GSE MBS Portfolios – a 5.3 Percent Decline in 2Q17

Today, Fannie and Freddie hold $13.50 billion of subprime and Alt A MBS. At the end of 2005, they had a staggering $258.67 billion in such assets.


August 17, 2017 - IMFnews

Walter’s Stock Crushed Yet Again on New Disclosure; Nonbank Plans to Remedy NYSE Delisting

Walter has a market capitalization (stock price multiplied by number of shares) of just $11.8 million…


August 17, 2017 - IMFnews

Citadel Offering One-Month Bank Statement Program with Minimum Credit Score of 700

In its new bank-statement program, Citadel will make mortgages of up to $3 million…


August 17, 2017 - IMFnews

Government-Insured Mortgages the Biggest Gainer in 2Q17

Roughly 71.0 percent of second-quarter primary-market originations of first-lien mortgages were purchase loans, the highest reading in years…


August 11, 2017 - IMFnews

What We’re Hearing: 10 Years Already? / When was the First (Subprime) Shot Fired? / And No. Nine for Fannie & Freddie / The New Nonprime Kids on the Block / Watt Seeking Political Cover? / How About $500,000 for the MID?

This year, nonprime production across the U.S. might top $3 billion to $4 billion at best. At its peak last decade, it was a $1 trillion a year business. That’s not a misprint…


August 10, 2017 - IMFnews

With Refi Activity Declining, Some Nonbanks Turn to Non-QMs, Including Nationstar

Non-QMs carry more regulatory risk than conventional loans, but an increasing number of shops are willing to take on the product as refis slump…


August 9, 2017 - IMFnews

Impac Shifts Production Away from GSE Mortgages to Non-QMs and Government-Insured Loans

In trading Wednesday, Impac’s share price was down almost 6 percent…


August 8, 2017 - IMFnews

Trade Groups Call on CFPB to Address the GSE ‘Patch’ One Way or Another

The Consumer Mortgage Coalition and MBA separately recommend replacing the GSE patch with a more transparent set of criteria…


August 8, 2017 - IMFnews

Loans in New ‘Nonprime’ MBS Look like ‘Alt A’ Loans Really

In fact, some of the underwriting characteristics on new nonprime loans are even stronger than the credit quality on pre-crisis Alt A mortgages…


August 7, 2017 - IMFnews

Jumbo Originations Up in 2Q17 as Banks Report Strong Demand

Lee Smith, an executive vice president and COO at Flagstar, said the bank’s jumbo originations were bolstered by the acquisition of Opes Advisors…


August 4, 2017 - Inside Nonconforming Markets

Average Jumbo Mortgage Interest Rates and Mortgage Performance

A page of jumbo data and the performance of non-agency mortgage-backed securities.


August 4, 2017 - Inside Nonconforming Markets

News Briefs

JPMorgan Chase is preparing to issue another large prime non-agency mortgage-backed security, according to documents filed this week with the Securities and Exchange Commission. It will be the third prime non-agency MBS from the bank this year. Moody’s Investors Service this week affirmed its assessment of First Republic Bank as a “strong” originator of jumbo mortgages. “First Republic distinguishes itself from other originators in its consistency ... [Includes two briefs]


August 4, 2017 - Inside Nonconforming Markets

Ocwen Takes $44 Million Net Loss in 2Q

Ocwen Financial reported a net loss of $44.44 million for the second quarter of 2017, with legal issues accounting for a large portion of the loss. The nonbank also agreed on terms with New Residential Investment to transfer mortgage servicing rights on non-agency mortgages. Ocwen had a $33.60 million expense in the quarter tied to legal settlements. “We settled additional legacy litigation matters further reducing future uncertainty,” said Ron Faris, the company’s president and CEO ...


August 4, 2017 - Inside Nonconforming Markets

Newer MBS Protected from Trustee Withholding

Investors in non-agency mortgage-backed securities continue to grapple with a decision by a trustee to withhold millions of dollars from investors in vintage deals. Industry analysts suggest that post-crisis non-agency MBS include protections against such withholding. At the end of June, Wells Fargo withheld $94.3 million in funds from investors in 20 non-agency MBS that were subject to clean-up calls by New Residential Investment. The deals in question are the subject of a lawsuit ...


August 4, 2017 - Inside Nonconforming Markets

Impac Aims to Issue a $400 Million Non-QM MBS

Impac Mortgage Holdings has continued to increase its production of non-qualified mortgages and plans to issue a $400.0 million mortgage-backed security collateralized by such loans, according to officials at the nonbank. Impac originated $289.60 million of non-QMs in 2016. In the first half of 2017, the nonbank had $416.70 million in non-QM volume. “We’ve seen a decrease in the conforming market and now month-over-month, we’re seeing an increase in the non-QM market ...


August 4, 2017 - Inside Nonconforming Markets

Loans in New Nonprime MBS Look Like Alt A

Participants in the post-crisis nonprime mortgage-backed securities market have resisted efforts to brand their deals as “subprime” and for good reason: the loans backing these transactions more closely resemble pre-crisis Alt A mortgages. In fact, some of the underwriting characteristics on new nonprime loans are even stronger than the credit quality on pre-crisis Alt A mortgages, according to an analysis by Inside Nonconforming Markets. Between ... [Includes one data chart]


August 4, 2017 - Inside Nonconforming Markets

Redwood to Issue ‘Expanded-Prime’ MBS

Redwood Trust is acquiring enough “expanded-prime” mortgages to put together a non-agency securitization, according to officials at the real estate investment trust. Redwood announced this week that it plans to issue a mortgage-backed security collateralized by loans from its “Choice” program as soon as September. The Choice program allows for somewhat looser underwriting standards than what’s typically seen in the jumbo MBS market, such as slightly higher debt-to-income ratios or ...


August 4, 2017 - Inside Nonconforming Markets

Flagstar’s New Jumbo MBS Has a Couple of Quirks

The first post-crisis prime non-agency mortgage-backed security from Flagstar Bank looks a lot like other deals issued in recent years, including exceptionally strong underwriting standards. However, the bank did break from the pack slightly with a few features in the new issuance. The $443.79 million Flagstar Mortgage Trust 2017-1 received AAA ratings with credit enhancement of 6.25 percent on the senior tranche. The deal was predominantly backed by non-agency jumbos, but ...


August 4, 2017 - Inside Nonconforming Markets

Jumbo Originations Up in 2Q17 As Banks Report Strong Demand

A handful of banks that provide an early look at jumbo origination activity boosted volume in the second quarter of 2017, according to an analysis by Inside Nonconforming Markets. First Republic Bank funded $3.05 billion in single-family originations in the second quarter, up 21.0 percent from the previous period and a 4.1 percent increase from the second quarter of last year. Jumbos account for a large majority of the bank’s total production. “Overall, loan demand is strong, though ...


August 4, 2017 - IMFnews

Redwood Trust Ready to Test the MBS Waters with ‘Expanded’ Prime

Choice mortgages carry rates that are roughly 100 basis points to 125 basis points higher than rates on Redwood’s super-prime program, known as Select.


August 3, 2017 - IMFnews

Fix & Flip Lender CALCAP Gets Equity Investment, Hires Former Flagstar Executive

Not counting the new investment from Gatehouse, CALPCAP has raised $225 million from investors since its inception 10 years ago. Company principal Mark Mozilo told IMFnews the firm is continuing to hire as it builds out a national lending platform.


August 2, 2017 - IMFnews

Walter’s Stock in a Freefall (Again) in Wake of ‘Restructuring’ Plan. Firm Projects Loss for 2017

The company has been trying to restructure its operations under CEO Anthony Renzi, who joined the firm last year.


August 2, 2017 - IMFnews

Uncertainty for Non-Agency MBS Investors as Trustees Remain Quiet on Whether they will Follow Wells in Withholding Funds

The maneuver was uncommon and prompted speculation that other trustees might take similar actions.


August 2, 2017 - IMFnews

Ocwen Exits Correspondent Channel, Takes $44.4 Million Net Loss in Second Quarter

Ocwen originated $699.6 million in the second quarter, with a near doubling of retail originations unable to fully offset the wind-down in correspondent production…


August 1, 2017 - IMFnews

After Years of Shedding Servicing Rights, BofA Getting Close to a Normalized Portfolio

A telling sign: Bank of America employed 6,603 servicing employees as of the end of 2016, down 78.0 percent compared to the end of 2013.


July 24, 2017 - IMFnews

After Delisting Warning, What Lies Ahead for Walter/Ditech?

The lender/servicer suffered another blow this spring when it revealed that some of its previously issued financial statements could not be relied upon because of what it called an “accounting error.”


July 24, 2017 - IMFnews

Fixed-Rate Loans Dominate Non-Agency MBS

By comparison, ARMs accounted for less than 1.0 percent of total prime non-agency MBS issued in the first quarter.


July 21, 2017 - Inside Nonconforming Markets

Average Jumbo Mortgage Interest Rates and Mortgage Performance

A page of jumbo data and the performance of non-agency mortgage-backed securities.


July 21, 2017 - Inside Nonconforming Markets

News Briefs

The $210.45 million mortgage-backed security Angel Oak Capital Advisors issued earlier this month had the tightest execution of any MBS backed by non-qualified mortgages, according to Sreeni Prabhu, Angel Oak’s co-CEO and CIO. “We believe investors like Angel Oak’s vertically integrated issuer model,” Prabhu said. “This is unique in the marketplace and offers them a ‘pure play’ exposure to Angel Oak’s origination and underwriting capabilities.” ... [Includes six briefs]


July 21, 2017 - Inside Nonconforming Markets

Non-Agency Participants Call for More TRID Fixes

The Consumer Financial Protection Bureau needs to do more to address problems with the TILA-RESPA Integrated Disclosure rule, according to participants in the non-agency market. The final rule issued this month by the CFPB was seen as helpful but insufficient. The final rule from the CFPB clarified some issues and formalized some guidance. The Structured Finance Industry Group said uncertainty regarding TRID violations persists. “SFIG applauds the efforts of the CFPB to ...


July 21, 2017 - Inside Nonconforming Markets

Invictus Shows Variety with New Nonprime MBS

A new nonprime mortgage-backed security from Invictus Capital Partners varies in some ways from the deal the firm issued in February. Invictus is set to issue the $241.00 million Verus Securitization Trust 2017-2. The deal the firm issued in the first quarter – the first MBS from Invictus – was for $145.02 million. The purchase-mortgage share in the new deal is down sharply compared with the previous MBS from Invictus, at 46.0 percent compared with 68.3 percent. The cash-out refinance ...


July 21, 2017 - Inside Nonconforming Markets

Redwood Taps First Republic, Quicken for Jumbos

Loans from more than 100 lenders are in the latest jumbo mortgage-backed security from Redwood Trust but most of the lenders contributed such a small volume of loans to the issuance that they weren’t identified by rating services. Only two lenders have consistently provided more than 5.0 percent of the dollar volume in jumbo MBS Redwood has issued this year: First Republic Bank and Quicken Loans. Loans from First Republic account for 19.6 percent of the $485.25 million ...


July 21, 2017 - Inside Nonconforming Markets

Fixed-Rate Loans Dominate Non-Agency MBS

Only fixed-rate mortgages were included in prime non-agency mortgage-backed securities issued in the second quarter of 2017, according to an analysis by Inside Nonconforming Markets. It was the third quarterly interval since the first quarter of 2016 that adjustable-rate mortgages and loans with interest-only features were excluded from prime/jumbo MBS. And in the first quarter of 2017, ARMs accounted for less than 1.0 percent of total prime non-agency ... [Includes two data charts]


July 21, 2017 - Inside Nonconforming Markets

Wells Sends Mixed Signals on Jumbo IOs

John Shrewsberry, CFO of Wells Fargo, told the bank’s investors last week that Wells is taking some steps to boost mortgage originations, including an emphasis on interest-only loans. “We are making some modest changes to generate new loan originations, including offering interest-only jumbo mortgage loans to high quality borrowers ...,” Shrewsberry said during Wells’ earnings call. However, when asked for further details, Tom Goyda, a spokesperson for Wells, downplayed ...


July 21, 2017 - Inside Nonconforming Markets

PIMCO Calls for Non-Agency Reforms

Policymakers should make a number of changes to regulations to entice investors to buy new non-agency mortgage-backed securities, according to officials at Pacific Investment Management Company. PIMCO was a major investor in pre-crisis non-agency MBS. “Unlike the complexities of government-sponsored enterprise reform, a few minor, straightforward changes – some of which can be done through regulation, not legislation – can be made to bring private capital back to the market ...


July 21, 2017 - Inside Nonconforming Markets

Flagstar to Issue Jumbo MBS, Joining Chase As the Only Active Bank Issuer in the Market

The jumbo mortgage-backed security market is set for a significant boost as Flagstar Bank will issue MBS. Since 2015, only one bank has issued jumbo MBS: JPMorgan Chase. Other issuers have all been nonbanks as banks have largely opted to retain jumbos in portfolio instead of issue non-agency MBS. Some details about the planned Flagstar Mortgage Trust 2017-1 were revealed this week in documents filed with the Securities and Exchange Commission ...


July 21, 2017 - IMFnews

What We’re Hearing: A Good Quarter for Angel Oak, MBS Plans for Citadel / Sprout Sprouting? / Freddie About to Make Splash in SFR Market? / Trump, the Russians (Soviets) and a Housing Solution? / Not-Happy Birthday: Dodd-Frank Turns Seven

A housing crisis in America? Maybe the Russians can help...


July 21, 2017 - IMFnews

Solid Gains for Non-Mortgage ABS in 2Q17 – Thanks, in Part, to Pizza

A lot of the ABS oomph came from the $2.08 billion whole-business securitization by Domino’s Pizza...


July 21, 2017 - IMFnews

New Legal Settlement Will Prove Costly to Ocwen

However, the legal settlement likely will ding sector quarter earnings by $34 millon to $36 million…


July 20, 2017 - IMFnews

Invictus Packages a Variety of Mortgages into Nonprime MBS; Greenbox the Top Contributor

GreenBox was the top contributor to the new nonprime MBS with Sprout Mortgage a close second…


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