Redwood Trust loosened its underwriting guidelines for jumbo mortgages in an effort to acquire loans beyond the typical standards set by big banks, according to officials at the real estate investment trust. “It’s meant to [address] the entire universe outside of the banks while still serving borrowers who we think are good candidates and will repay,” Christopher Abate, president of Redwood, said during an investor presentation in September. Redwood introduced its Choice expanded-prime ...

Ocwen Financial revealed last week that it won’t face enforcement actions from the Securities and Exchange Commission regarding two outstanding investigations. And the nonbank has reached settlements with a number of the state regulators that took actions against the company earlier this year. The SEC was conducting investigations involving Ocwen regarding the use of collection agents and fees and expenses related to liquidated loans and real estate-owned ...

A slowdown in new scratch-and-dent deals proved to be a drag on non-agency MBS issuance during the third quarter, according to a new analysis and ranking by Inside MBS & ABS. Total non-agency MBS production fell to $10.99 billion in the third quarter of 2017, a 29.9 percent decline from the previous period. It was the slowest quarter of 2017, although year-to-date production was still up 14.1 percent from the first nine months of 2016. The major factor was ... [Includes two data charts]

The Treasury Department released a report late last week calling for a variety of regulatory reforms for the MBS and ABS markets. Many of the reforms aim to increase issuance and are likely to come into effect, particularly those that don’t require action by Congress. The recommendations were part of a response to an executive order issued by President Trump calling for regulators to identify actions to be taken to align financial regulations with “core principles” established by ...

The average daily trading volume in agency MBS increased to $223.2 billion in September, the second highest reading of the year, according to figures compiled by the Securities Industry and Financial Markets Association. Compared to August, trading volume was up about 12.1 percent, but flat compared to the same month a year ago. The increase in activity coincided with declining bond prices and rising interest rates. As the weekend approached, the yield on the benchmark ...

The agency single-family MBS market continued cranking along during the third quarter of 2017, but other sectors in structured finance saw weakening issuance, according to an exclusive new analysis and ranking by Inside MBS & ABS. Some $407.55 billion of MBS and ABS – excluding collateralized debt obligations and agency credit-risk transfer deals – were issued during the third quarter. That was off 4.9 percent from the previous three-month period and it ... [Includes three data charts]

Investor demand for non-agency MBS backed by re-performing loans has prompted an increase in issuance, with a new emphasis on deals that have credit ratings. Chimera Investment issued its first rated RPL transaction this week and MetLife Investment Management is preparing to enter the market as an issuer. “Rated RPL MBS has fundamentally changed the market,” Scott Waterstredt, a managing director at MetLife, said at the recent ABS East conference. He noted that ...

Nomura Holdings and the Royal Bank of Scotland fought a long battle but eventually lost in a court appeal last week when the judge decided not to undo an earlier order forcing them to pay the government $839 million. The settlement was based on the banks not being truthful about non-agency MBS sold to Fannie Mae and Freddie Mac prior to the housing meltdown. The firms’ lawyers chose to appeal the 2015 decision by U.S. District Court Judge Denise Cote. She found the companies ...

Two of the most active originators of nonprime loans that don’t meet the qualified-mortgage test are working on new MBS deals, though market timing is a little uncertain at this point. Mike Fierman, managing partner of the Angel Oak Companies, said the Atlanta-based company has a transaction on the drawing board, but noted that the two recent hurricanes have slowed progress. “As a result … we are taking steps to re-verify the condition of all properties and are offering borrowers assistance if necessary,” said the managing partner. Fierman noted...

S&P Global ranked as the top rating service in the non-mortgage ABS market during the first half of 2017, with strong market shares in the major asset categories, according to a new ranking and analysis by Inside MBS & ABS. S&P rated $69.54 billion of ABS issued in the first half of the year, roughly 60.1 percent of total issuance by dollar volume. For all of 2016, the company finished second in ABS ratings with a 53.6 percent share of the market. S&P had...[Includes two data tables]