Annaly Capital Management completed its acquisition of Hatteras Financial this week, prompting a hold on jumbo operations at Hatteras, according to a message reviewed by Inside Nonconforming Markets. Hatteras formed its jumbo conduit, Onslow Bay Financial, in 2013, with a focus on adjustable-rate mortgages. In a note sent to conduit sellers recently, an official at Onslow Bay Financial said Annaly notified the conduit that the real estate investment trust stopped ...

An aggregator review of Redwood Trust by Moody’s Investors Service included an affirmation of an “above average” assessment of the firm’s prime jumbo activities along with some criticism of Redwood’s quality control process, among other issues. Moody’s assessment of Redwood’s quality control and audit activities was lowered from average to below average “because Redwood eliminated its independent third-party review quality control process in lieu of due diligence results ...

Underwriting characteristics on the jumbo mortgage-backed securities issued in the second quarter of 2016 loosened slightly, according to a new analysis by Inside Nonconforming Markets. The average combined loan-to-value ratio increased somewhat compared with recent quarters and average credit scores declined. Small fluctuations in average debt-to-income ratios have also been seen in the past years. The underwriting characteristics for ... [Includes two data charts]

The costs and benefits of a deal agent will vary based on loan characteristics, according to a new analysis by Fitch Ratings. Costs for jumbo mortgage-backed securities will be relatively low, while costs for nonprime MBS will be higher, along with potentially greater benefits when assessing the representations and warranties on a deal. Non-agency MBS issuers continue to work toward including a deal agent in new transactions as some investors have called for the feature ...

Investors in non-agency mortgage-backed securities serviced by Ocwen Financial released a report this week calling for Standard & Poor’s to upgrade Ocwen’s servicer ratings. In June 2015, S&P downgraded Ocwen Loan Servicing’s servicer ratings to “below average,” citing regulatory issues and investor scrutiny along with concerns about internal audits at Ocwen. The downgrade is a focus for some investors because some of the non-agency MBS serviced by Ocwen have ...

Social Finance is originating $70 million per month in jumbo mortgages and is considering issuing a jumbo mortgage-backed security, according to industry participants that have met with officials at the marketplace lender. Adjustable-rate mortgages accounted for approximately 25.0 percent of jumbo originations in May, according to Black Knight Financial Services. The firm said the jumbo ARM share of originations has declined from 29.0 percent as recently as ... [Includes five briefs]

Issuers considering including a deal agent in new non-agency MBS will have to look to investors to pay up for the feature as there won’t be much of a rating benefit, according to Fitch Ratings. Some investors have been pushing for a deal agent that would have oversight of various participants in the transaction along with a fiduciary duty to investors. Broad outlines for deal agent responsibilities have been established, but details regarding compensation remain uncertain. Some issuers, including Redwood Trust, have indicated...

Marketplace lender Social Finance is contemplating a securitization of jumbo mortgages, according to industry officials who claim to have knowledge of the firm’s operations. The news comes amid an interesting time for the jumbo loan market: production volumes are generally strong and likely will be boosted even more by the recent decline in interest rates. But even established nonbank players have been avoiding the securitization route, opting instead to sell newly originated jumbos to commercial banks. SoFi, as the privately held company is known, has been placing...

The concerns among participants in the jumbo MBS market regarding the TILA-RESPA Integrated Disclosure rule might have been much ado about nothing. A new report from Moody’s Investors Service suggests that TRID violations won’t materially increase losses in jumbo MBS. The rating service said third-party due diligence reviews will identify loans in violation of TRID, and lenders and aggregators will be able to cure many TRID violations before the mortgages are placed in jumbo MBS. Three jumbo MBS have included...

Fannie Mae and Freddie Mac saw significant increases in the flow of both refinance loans and purchase-money mortgages during the second quarter of 2016, according to a new ranking and analysis by Inside Mortgage Finance. And for the first time in a long while, nonbank mortgage companies delivered over half of the single-family mortgages securitized by the two government-sponsored enterprises. Fannie and Freddie securitized...[Includes three data tables]