With backing from President Obama, the Federal Housing Finance Agency is considering lowering Fannie Mae and Freddie Mac loan limits in 2014. Industry participants have used the potential change to call on the Consumer Financial Protection Bureau to alter requirements for qualified mortgages. “Assuming the loan limits are lowered, the problem of excluding too many loans from QM coverage could be addressed, at least temporarily, by modifying the ability-to-repay rule,” Pete Mills, a ...

Richard Johns, executive director of the Structured Finance Industry Group, said the SFIG is apprehensive about the overall effect the ability-to-repay rule and qualified mortgage provisions will have on jumbo mortgage lending. The SFIG recently met with the Consumer Financial Protection Bureau to discuss the issues. In a follow-up letter sent in August, the SFIG said its primary concerns are the effect the debt-to-income ratio requirement for QMs will have on borrower access to jumbos; the ...

Banks have been retaining recent originations of jumbo mortgages in portfolio while selling vintage mortgage servicing rights to nonbanks or entering into subservicing agreements. And with the rise in interest rates, banks have increased their appetite for adjustable-rate mortgages. Banks held $1.76 trillion in first liens in portfolio as of the end of the second quarter of 2013, down only 0.1 percent from the second quarter of last year, according to a new ranking and analysis ... [Includes one data chart]

Appetite for jumbo mortgages among big banks has limited issuance of non-agency jumbo mortgage-backed securities in recent months. And analysts suggest that the next increase in the guaranty fees charged by the government-sponsored enterprises could shift even more production to bank portfolios instead of into non-agency MBS. Certain big banks continue to offer interest rates on jumbos that are below rates on comparable mortgages with conforming balances. For a 30-year fixed-rate non-agency jumbo with ...

Redwood Trust issued its latest non-agency jumbo mortgage-backed security last week, two days after presale reports on the deal were published. It was a quick turnaround for the real estate investment trust, as jumbo MBS investors have generally had at least a week to mull investing in deals before they close. The mortgages in the $346.32 million Sequoia Mortgage Trust 2013-11 also had an exceptionally young weighted-average loan age of 0.5 months, according to Kroll Bond Rating Agency ...

Credit Suisse issued its latest non-agency jumbo mortgage-backed security at the end of August, about one month after the previous issuance from the investment bank. Mortgages in the latest security, the $399.77 million CSMC Trust 2013-7, were seasoned an average of three months, according to DBRS. The mortgages have a weighted average interest rate of 3.875 percent. All of the mortgages have 30-year fixed-rate terms, and one has a 10-year interest-only feature. The deal received AAA ratings with ...

Correspondent lenders whose mortgages end up in non-agency jumbo mortgage-backed securities could be required by issuers to retain a portion of the risk from the issuance, according to the net risk-retention rule proposed last week by federal regulators. As with the risk-retention rule originally proposed in 2011, the new proposal allows security sponsors to require certain originators to retain risk on securitized assets. Issuers of non-agency MBS subject to risk-retention requirements would be ...

Fannie Mae is starting to market a risk-sharing transaction to investors. A Fannie spokesman said the government-sponsored enterprise is working with the Federal Housing Finance Agency to meet the goals set by the conservator of the GSEs. Mark Lefanowicz will be the CEO of Fenway Summer’s mortgage venture, according to an announcement this week by Raj Date, the founder of the firm. Fenway Summer plans to originate non-qualified mortgages and Lefanowicz has previously worked at ... [Includes five briefs]

The Department of Housing and Urban Development is phasing out the Saver and Standard loan products under the Home Equity Conversion Mortgage program in favor of a new reverse mortgage that limits the amount of money a borrower can draw at closing to 60 percent of the value of the home. The fixed and adjustable HECM Standard and Saver options will still be available until Sept. 29, said HUD. The revised principal limit, pricing and disbursement policies for the new HECM product will become effective on Sept. 30. The revised HECM guidance also ...

Purchase-money lending increased by a hefty 37 percent, climbing to an estimated $163 billion in the second quarter, according to figures compiled by Inside Mortgage Finance.