Due diligence can be a more significant factor in the rating of a jumbo mortgage-backed security than the representations and warranties on the deal, according to Kroll Bond Rating Agency. However, major investors in non-agency MBS have expressed concerns about due diligence on new deals along with the adequacy of disclosures. At a structured-finance investor conference hosted by KBRA this month, the rating service noted that it doesn’t adjust expected losses or credit enhancement for variations in ...

Jumbo conduits have made strong progress in controlling for risks from non-retail mortgages, according to Moody’s Investors Service. The rating services tend to view retail originations as the safest channel due to lower risk of fraud. While loans from brokers have traditionally performed worse than loans from other channels, jumbo conduits have implemented a number of measures to reduce fraud risk. “New Penn Financial, for example, contacts borrowers directly with well-scripted calls designed to ...

The five-year transition toward a non-agency market contemplated in government-sponsored enterprise reform legislation in the Senate is far from guaranteed, according to industry participants. A number of questions have been raised about the timing and the ability of private players to replace the GSEs. “The idea that ‘if you build it, they will come,’ may work in the movies, but you are playing with the nation’s housing-finance system,” James Millstein, chairman and CEO of Millstein & Co., an advisory group ...

The Consumer Financial Protection Bureau released a final rule last week regarding long-running efforts to integrate mortgage-disclosure documents. The new “Know Before You Owe” forms will be required beginning Aug. 1, 2015. Lenders will be required to give potential borrowers a loan-estimate form within three business days after receiving a complete loan application. The form replaces the early Truth in Lending Act statement and the Good Faith Estimate required by the ... [Includes three briefs]

Commercial banks and savings institutions reached a record level of investment in non-mortgage ABS during the third quarter of 2013, according to a new Inside MBS & ABS analysis and ranking. Banks and thrifts held a combined $173.12 billion of non-mortgage ABS as of the end of September, up 4.4 percent from the previous quarter. The industry’s aggregate ABS portfolio was up 6.9 percent from the third quarter of last year. Banks and thrifts pushed...[Includes one data chart]

The Department of Housing and Urban Development is considering an industry request to delay the implementation of a proposal requiring FHA lenders to perform a financial assessment of all prospective borrowers of Home Equity Conversion Mortgage loans. In remarks during the National Reverse Mortgage Lenders Association’s recent annual meeting in New Orleans, FHA Commissioner Carol Galante said HUD is still studying the comments and will need more time to implement the rule. In September, the FHA published a notice in the Federal Register seeking comment on the financial assessment proposal. The proposal is currently in ...

Fannie Mae and Freddie Mac are designing a securitization framework that will work for today’s fully-guaranteed residential MBS as well as securities with a partial government guaranty or none at all, according to an update released this week by the Federal Housing Finance Agency. Among the initiatives set for the government-sponsored enterprises by the FHFA is the development of a contractual and disclosure framework designed to give MBS investors more clarity and confidence about what they’re…

The jumbo market accounted for 16.7 percent of total mortgage originations during the third quarter of 2013 and was much stronger than other sectors.

“Watt will not lower the ceiling for 2014,” said one mortgage insurance executive. “Maybe, he will change them at some point but, not next year.”

The civil action entails the alleged taking from WJB of some 5,000 loan files. It should be noted that these aren’t just any LOs – the group in question ranks among the top producers in the nation.