Nonconforming Securitization

Browse articles from all of our Newsletters related to Nonconforming Securitization.

January 18, 2019 - 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.


January 18, 2019 - Inside Nonconforming Markets

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]


January 18, 2019 - Inside Nonconforming Markets

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 ...


January 18, 2019 - Inside Nonconforming Markets

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 ...


January 18, 2019 - Inside Nonconforming Markets

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 ...


January 18, 2019 - Inside Nonconforming Markets

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 ...


January 18, 2019 - Inside Nonconforming Markets

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 ...


January 18, 2019 - Inside Nonconforming Markets

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 ...


January 18, 2019 - Inside Nonconforming Markets

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]


January 18, 2019 - Inside MBS & ABS

Wells Makes Some Changes To Second Post-Crisis Deal

Wells Fargo’s second post-crisis jumbo MBS differs from the one it issued in October. The new deal is substantially larger than the previous issuance and the lineup of three rating services is somewhat different.


January 11, 2019 - Inside MBS & ABS

Redwood Set to End a Lull in Prime Non-Agency MBS

Redwood Trust is set to issue the first prime non-agency MBS the market has seen in more than a month. Issuance has all but grounded to a halt after October, but industry analysts expect more volume to flow following the Redwood deal.


January 11, 2019 - Inside MBS & ABS

Non-Agency MBS Issuance Faded in Fourth Quarter

Production of new non-agency MBS fell sharply in the fourth quarter, ending a year that still set a post-crisis record for new issuance. [Includes three data charts.]


January 4, 2019 - 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.


January 4, 2019 - Inside Nonconforming Markets

News Briefs

CORRECTION: The ranking published in the Dec. 14, 2018, issue of Inside Nonconforming Markets of Top Bank/Thrift First-Lien Residential Mortgage Portfolios for 3Q18 included some errors. An updated version of the ranking and story are available at www.insidemortgagefinance.com. Redwood Trust is preparing to issue a $349.6 million prime non-agency mortgage-backed security, according to presale reports published this week by ... [Includes four briefs]


January 4, 2019 - Inside Nonconforming Markets

MBS Issuers Experimenting With Stop-Advance Feature

Issuers of non-agency mortgage-backed securities are adding more variety to the stop-advance features of the deals, leading to criticism from rating services. Industry analysts, though, said the move doesn’t necessarily create new risks. With non-agency MBS, master servicers have to advance the principal and interest due for delinquent loans. Historically, they had to make the payments if the advances were deemed recoverable, analysts at Deutsche Bank Securities noted ...


January 4, 2019 - Inside Nonconforming Markets

ATR Rule Limiting Loans to Self-Employed Borrowers

Some self-employed workers are missing out on mortgages because of harsh standards included in the Consumer Financial Protection Bureau’s ability-to-repay rule, according to analysts at the Housing Finance Policy Center. “The mortgage market is not adequately meeting the needs of self-employed households,” the analysts said. The HFPC noted that in 2016, about 8.5 percent of U.S. households were headed by a self-employed person and 3.4 percent were salaried but earned some ...


January 4, 2019 - Inside Nonconforming Markets

Redwood Sticks out in Assessment by Moody’s

Moody’s Investors Service recently completed a round of assessments of originators and aggregators of non-agency mortgages. One of the key findings showed that Redwood Trust has a loan review policy for prime jumbo mortgages that differs from other aggregators. “Redwood continues to be the only aggregator that we have assessed to date who does not conduct full reviews on 100 percent of acquired prime jumbo residential mortgage loans,” Moody’s said. Three banks ...


January 4, 2019 - Inside Nonconforming Markets

Angel Oak Expects Sustained Non-QM Growth in 2019

Angel Oak Companies set company records for originations of non-qualified mortgages in 2018 and officials expect more growth this year. “Non-QM is booming, we’re going to set an all-time record in December and we’ve set records each quarter in 2018,” said Tom Hutchens, senior vice president of sales and marketing at Angel Oak Mortgage Solutions. “We’re continuing to see more people participate in the market, which is a great thing.” Through the first three quarters of 2018, Angel Oak ...


January 4, 2019 - Inside Nonconforming Markets

Non-Agency Market May Get a Boost from FHFA

Industry analysts expect Mark Calabria to shake things up at the Federal Housing Finance Agency – that is, once he’s approved by the full Senate. “The nomination of Calabria should, in our view, be taken as an indication of the administration’s and the Treasury Department’s will to tackle housing reform proactively, rather than maintain the status quo,” analysts at Bank of America Merrill Lynch said. According to Wells Fargo Securities, Calabria’s nomination is one of the most significant ...


January 4, 2019 - Inside Nonconforming Markets

Issuance of Non-QM MBS Expected to Rise in 2019

The market for mortgage-backed securities with non-qualified mortgages will continue to grow in 2019, according to industry analysts. However, the annual doubling of volume seen in recent years appears unlikely. Analysts at both Bank of America Merrill Lynch and Wells Fargo Securities project non-QM MBS issuance to increase by about 60 percent in 2019. Some $11.38 billion of expanded-credit MBS, including non-QMs, was issued in 2018, according to Inside Nonconforming ...


January 4, 2019 - Inside Nonconforming Markets

Non-Agency MBS Issuance Nearly Doubles in 2018

The total dollar volume of non-agency mortgage-backed securities backed by new originations nearly doubled in 2018, according to a new ranking and analysis by Inside Nonconforming Markets. Some $29.08 billion of non-agency MBS backed by new loans was issued in 2018, a 94.3 percent increase from 2017. Issuance of both prime non-agency MBS and expanded-credit deals hit post-crisis highs last year. Some $17.69 billion of prime non-agency ... [Includes one data chart]


December 20, 2018 - Inside MBS & ABS

DBRS Ranked Tops in Non-Agency MBS Ratings at 9-Month Mark in 2018, S&P First in ABS

DBRS continued to rank as the most active rating servicing in non-agency MBS as of the end of the third quarter, with S&P Global leading the industry in ABS ratings, according to a new ranking by Inside MBS & ABS. [Includes two data charts.]


December 14, 2018 - 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.


December 14, 2018 - Inside Nonconforming Markets

News Briefs

The Consumer Financial Protection Bureau proposed new policies this week regarding no-action letters and the establishment of a “product sandbox.” The proposal aims to help financial services companies develop innovative products. Lauren Saunders, associate director of the National Consumer Law Center, was highly critical of the proposal, claiming that it could “wipe out consumer protection laws for entire industries.” She said the proposal is certain to ... [Includes four briefs]


December 14, 2018 - Inside Nonconforming Markets

Interest-Only Lending Declines in Third Quarter

Originations of interest-only mortgages declined by 6.6 percent on a sequential basis in the third quarter among a group of lenders surveyed by Inside Nonconforming Markets. Total first-lien mortgage originations declined by 2.2 percent in that span. Fifteen lenders originated $4.74 billion of IOs in the third quarter. Some 33 percent of the lenders managed to increase their IO production on a quarterly basis, with large gains at Citadel Servicing, PNC Mortgage and ... [Includes one data chart]


December 14, 2018 - Inside Nonconforming Markets

Citadel Makes a Case for Vertical Integration

Brokers and correspondents looking for nonprime lenders to work with should consider the benefits provided by firms with vertical integration, according to a recent white paper by Citadel Servicing Corp. Citadel happens to be a vertically-integrated lender with wholesale and correspondent operations along with a servicing platform. The lender defined vertical integration as the combination of two or more stages of production at one company as opposed to the stages ...


December 14, 2018 - Inside Nonconforming Markets

Issuers Bring MBS Close to Year End

With 2018 winding down, issuers of non-agency mortgage-backed securities introduced two new deals this week. Neuberger Berman is set to issue its second expanded credit MBS of the year while Verus Mortgage Capital is planning its second deal backed by nonprime loans for investment properties. Neuberger Berman’s Homeward Opportunities Fund I Trust 2018-2 will be a $320.1 million deal and Verus Securitization Trust 2018-INV2 will be a $254.8 million issuance. Sprout Mortgage ...


December 14, 2018 - Inside Nonconforming Markets

Asset-Based Underwriting Prompts Warning

An increase in asset-based underwriting by banks prompted warnings from the Office of the Comptroller of the Currency last week. The OCC said its examiners have seen greater use of asset dissipation underwriting, a practice used to qualify borrowers using a hypothetical income stream from their asset liquidation rather than debt-to-income ratios. Banks are increasingly using asset dissipation or asset depletion as a response to “intense competition” from nonbanks, among other ...


December 14, 2018 - Inside Nonconforming Markets

Banks Increase Holdings of First Liens

Holdings of first-lien mortgages by banks and thrifts increased in the third quarter, according to an Inside Nonconforming Markets analysis of call reports. Banks and thrifts held $2.07 trillion of first liens in their portfolios at the end of September, up 1.2 percent from June and 4.3 percent from a year ago. The holdings have largely been boosted by jumbo mortgages along with loans eligible for sale to the government-sponsored enterprises ... [Includes one data chart]


December 14, 2018 - Inside Nonconforming Markets

Ocwen Plans Non-Agency Originations in 2Q19

Ocwen Financial announced last week that it plans to launch non-agency originations in the second quarter of 2019, focusing on borrowers already in its servicing portfolio. The company detailed the plans in presentations to investors. Officials said Ocwen is expanding from originating agency mortgages into non-agency mortgages in an effort to maximize the potential to recapture borrowers in Ocwen’s servicing portfolio. The move is years in the making and follows a ...


December 14, 2018 - Inside Nonconforming Markets

ARM Share Drops in Third Quarter

The adjustable-rate mortgage share of total originations declined in the third quarter of 2018, according to a new ranking and analysis by Inside Nonconforming Markets. An estimated $50.0 billion of ARMs were originated in the third quarter, accounting for 11.5 percent of total originations. In the previous quarter, an estimated $55.0 billion of ARMs were originated, making up 12.4 percent of the market. ARM volume was also down from ... [Includes one data chart]


December 14, 2018 - Inside Nonconforming Markets

Outlook for Prime Non-Agency MBS Issuance Closely Connected with GSE Pricing, Tools

Issuance volume and lending practices in the prime non-agency mortgage-backed security market in 2019 will be linked in several ways to the government-sponsored enterprises, according to industry analysts. Volume projections for prime non-agency MBS depend on pricing differences between non-agency execution and delivery of loans to Fannie Mae and Freddie Mac. Non-agency lenders are also expected to increasingly use tools developed by the GSEs. “We expect robust issuance from ...


December 14, 2018 - Inside MBS & ABS

Carrington Prepping Its First Non-QM MBS; Angel Oak Will be Active as Others Eye Entry Into the Market

With more lenders eyeing the non-qualified mortgage sector for entry in 2019, the deal volume for non-agency MBS could pick up significantly in the quarters ahead.


December 14, 2018 - Inside MBS & ABS

Non-Agency MBS Outstanding Nearing End of 11-Year Tunnel, Agency Market Plods Forward

The supply of single-family non-agency MBS continued to decline in the third quarter of 2018, but the sector may be nearing a turnaround point, according to a new Inside MBS & ABS analysis of outstanding mortgage securities. [Includes two data charts.]


December 7, 2018 - Inside MBS & ABS

Ruling on Non-Agency MBS Statute of Limitations in NY Prompts Reconsideration of Accrual Clauses

Lawyers for issuers of non-agency MBS are revising deal documents and considering choosing a different state for issuance after an unfavorable ruling by the New York State Court of Appeals.


December 7, 2018 - Inside MBS & ABS

Demand for New Non-Agency MBS Fading, Lack of Depth Among Investors an Issue

The spreads on newly issued non-agency MBS have widened in recent months, indicating weak-er demand from investors. The pricing trends follow sharp increases in issuance this year, with analysts suggesting there may not be enough investors to absorb new production.


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