American International Group’s jumbo conduit has purchased a significant volume of mortgages in the past year and has plans to issue non-agency mortgage-backed securities. As of April, AIG Investments had purchased prime jumbo mortgages with an original balance of approximately $4.80 billion, according to Fitch Ratings. AIG launched its residential mortgage lending division in 2013 and has ramped up acquisition activity since then. Fitch recently assessed...

Credit Suisse this week issued a $91.2 million non-agency MBS backed by seasoned FHA mortgages. CSMC 2017-FHA1 marked the first non-agency securitization of re-performing FHA mortgages since 2010. The deal received an A rating from DBRS and an A1 rating from Moody’s Investors Service with subordination of 16.50 percent on the senior tranche. Moody’s cited a number of credit “challenges,” including uncertainty about FHA insurance payouts for liquidated mortgages, insufficient information on loan modifications and weak representations and warranties. The mortgages in the deal have...

Purchase-mortgage lending saw a big drop in volume during the first quarter of 2017, but indicators suggest that the sector has been rebounding in recent months and will post a solid gain by the time the year is over. An estimated $205.0 billion of purchase mortgages were originated in the first quarter, a sizable 19.6 percent decline from the previous period. But with an even bigger 44.6 percent slump in refinance lending, purchase mortgages accounted for over half (53.2 percent) of total first-lien originations in the first three months of the year. It was...[Includes three data tables]

Moody’s Rates Credit Suisse FHA Securitization Transaction. Moody’s assigned investment-grade ratings to Credit Suisse’s first securitization deal in 2017 backed by seasoned re-performing and performing, fully amortizing, fixed- and adjustable-rate mortgages insured by FHA. The deal is the first FHA-insured re-performing transaction since 2010, according to the rating agency. The collateral pool is comprised of 672 first-lien, fixed-rate loans and ARMs with a weighted average updated FICO score of 614 and loan-to-value ratio of 94.2 percent. Approximately 82.4 percent of the loans in the collateral pool were previously modified. Approximately 52.8 percent of the loans have been current for at least 24 months. Another 17.3 percent of the loans have been current for more than 12 months. Comments Sought on Various Information Collection Proposals. The Department of Housing and ...

An uptick in mortgage interest rates has reduced rate-term refinance volume but demand from borrowers for cash-out refis and home-equity loans appears to remain relatively strong. “When we look at the landscape for home-equity extraction, we see potential tailwinds from loan-to-value ratio and credit curing combined with slightly less stringent lending standards helping bolster borrower demand,” analysts at Wells Fargo Securities said in a report last week. Borrower LTV ratios have been helped...

The non-agency MBS market is set to receive a jolt as Wells Fargo plans to return to the space. “This year, one of our aspirations is to come back to the market with a couple of deals,” said Franklin Codel, a senior executive vice president of consumer lending at Wells. “We’re taking a look to make sure we can structure those properly … to try to test the market and see what we can do to bring some confidence back to the private-label market.” The official mentioned the plans late last week during an investor event hosted by Wells. Back in 2007, Wells ranked...

A unique disclosure Freddie Mac is providing in risk-sharing transactions can help provide MBS investors with forward-looking insight about mortgage performance, according to an analysis by Kroll Bond Rating Agency. Freddie started disclosing updated loan-to-value ratios for mortgages in its Structured Agency Credit Risk transactions in March 2016. On a quarterly basis, the government-sponsored enterprise discloses the estimated current LTVs based on Home Value Explorer (HVE), its proprietary automated valuation model. Connecticut Avenue Securities risk-sharing transactions from Fannie Mae don’t include a similar disclosure. KBRA noted...

Officials at Fannie Mae, Freddie Mac and their regulator are encouraged by – but by no means satisfied with – the progress made by the government-sponsored enterprises and their customers at expanding the credit box. “We do see an expansion of credit, steady growth in the 97 percent [loan to value ratio] programs and a little better distribution of credit scores,” said Bob Ryan, special advisor and acting deputy director at the Federal Housing Finance Agency during remarks at the secondary market conference sponsored by the Mortgage Bankers Association in New York this week. “But they are still skewed to the higher end more than in the past.” Fannie and Freddie are trying...

As industry participants continue to work on revamping standards and practices in the non-agency MBS market, Mark Adelson proposed a number of materiality standards for representations and warranties on new issuance. Adelson is an independent consultant and was S&P Global Ratings’ chief credit officer from May 2008 until December 2011. Adelson published his proposal in the latest issue of The Journal of Structured Finance, which he edits. Adelson focused...

The vacancy rate across single-borrower, single-family rental securitizations rated by Morningstar Credit Ratings fell to its lowest level in a year, as high retention rates for full-term leases kept performance in the sector within expectations, according to a company report. The vacancy rate dropped to 4.1 percent in March, driven by an improving average retention rate, which rose for the third consecutive month, the report said. The average retention rate for all single-borrower, single-family rental securitizations now stands at 79.5 percent, it noted. In addition, the overall turnover rate held...