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Volume 2019 - Number 2

January 18, 2019

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Loans with Higher LTV Ratios in 4Q18 Jumbo MBS

The average combined loan-to-value ratio on mortgages in jumbo mortgage-backed securities spiked towards the end of 2018, according to a new analysis by Inside Nonconforming Markets. In the first three quarters, the average combined LTV ratio for jumbo MBS issuance was around 70.0 percent. In the fourth quarter, it climbed to 76.2 percent. Several factors prompted the higher average, including the first post-crisis jumbo MBS stocked with ... [Includes two data charts]

Nonbanks Step Up Efforts With Non-Agency Products

To better compete with banks, several prominent nonbank lenders recently launched new non-agency products, including prime jumbo mortgages and non-qualified mortgages. They are even reducing pricing on non-agency products. On Jan. 2, PennyMac Financial Services, through its correspondent channel, introduced a non-QM program that allows credit scores as low as 660, combined loan-to-value ratios up to 90 percent, debt-to-income ratios up to 50 percent and ...

ATR Rule Curtails Non-Agency Lending

Originations of non-agency mortgages have taken a hit since the ability-to-repay rule came into effect, according to an analysis published by the Consumer Financial Protection Bureau last week. The CFPB report was based on assessment of application-level data from nine “larger” lenders, submissions and acquisitions data from Fannie Mae and Freddie Mac, and surveys of more than 190 lenders, among other sources. The ATR rule, which came into play in early 2014, established ...

Angel Oak Preps Largest Post-Crisis Nonprime MBS

Angel Oak Companies is set to issue the largest post-crisis nonprime mortgage-backed security. Nearly all of the loans in the $609.60 million deal were originated by Angel Oak, according to presale reports released this week by DBRS and Fitch Ratings. This issue tops a $489.57 million deal by an affiliate of Verus Mortgage Capital last year. Atlanta, GA-based Angel Oak originated 95.5 percent of the dollar volume of mortgages in the issue, 3.0 percent were produced by HomeBridge ...

Wells, Chase Bring Large Prime Non-Agency MBS

Wells Fargo and JPMorgan Chase are set to issue separate prime non-agency mortgage-backed securities that are significantly larger than their previous deals. The second post-crisis jumbo MBS from Wells is sized at $711.7 million, compared with the $441.3 million MBS issued in October. Presale reports for the new deal were published last week. Wells is testing the market for jumbo MBS and the new deal differs in some ways from the October one. Loans in the new deal have ...

NewRez MBS Flush with Loans to Self-Employed

The expansion-minded New Residential In-vestment Corp., New York, seems to have a thing for self-employed borrowers: Most of its recent non-agency MBS deals are stuffed with the product. Mortgages to self-employed borrowers will account for 75.9 percent of the pending $294.49 million MBS from New Residential. This is the company’s second MBS backed by non-qualified mortgages, following a $310.74 million issuance in October where the self-employed share was ...

Large-Balance Jumbos Originations on the Rise

Mortgages originated with a balance between $10.0 million and $20.0 million have surged in recent years, according to an analysis by Core-Logic. The Irvine, CA-based firm said it scrutinized property records and found more than 320 outstanding so-called mega jumbos, most of which were originated in 2013 and beyond. Some 13 mega jumbos were originated in 2013, and the number jumped to more than 50 in 2017. Numbers for all of 2018 aren’t available yet ...

News Briefs

The Structured Finance Industry Group named Michael Bright as president and CEO, effective Jan. 21. Bright was acting president of Ginnie Mae and before that, EVP and chief operating officer. “The securitization industry plays a fundamental role in our economy and it is vital that policymakers and the industry work constructively together as the market continues to evolve,” Bright said in a statement. PennyMac Financial Services ... [Includes four briefs]

Average Jumbo Mortgage Interest Rates and Mortgage Performance

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

Poll

Do mortgage lenders really need a new credit-scoring model or is the current FICO system adequate?

It’s fine. Stick with what works.
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