Conventional conforming mortgage originations mostly financed by Fannie Mae and Freddie Mac accounted for a record 66.8 percent of total single-family lending last year, according to a new market analysis and ranking by Inside Mortgage Finance. Mortgage lenders originated a whopping $1.273 trillion in conventional conforming mortgages in 2012, the highest level since the all-time record of $2.460 trillion was set back in 2003. Volume in the sector started strong and kept building throughout the year, including a 19.1 percent jump from the third to the fourth quarter. For the year, conventional conforming originations were...[Includes two data charts]
Credit Suisse this week obtained ratings on its first non-agency jumbo MBS of 2013 in a deal that includes sunsets for certain representation and warranties as well as a contribution from Two Harbors Investment, which has been working for years to issue non-agency MBS on its own. The $425.67 million CSMC Trust 2013-TH1 received AAA ratings from Fitch, DBRS and Standard & Poors. The top-rated tranche had a credit enhancement of 7.05 percent, well above the 5.85 percent level on Credit Suisses previous deals but in line with recent Redwood transactions. DBRS said...
Sellers of jumbo whole loans into the secondary market are getting prices of up to 103 and in some cases more which on paper might throw a monkey wrench into the economics of trying to create a new MBS, but its not turning out that way. According to loan traders and industry consultants, MBS spreads to Treasuries have tightened over the past several weeks, making the economics of issuing a security better, even though the price for the underlying product might look a bit rich for potential issuers. The cost of funds are going down, said one trader. According to Craig Cole, a principal in Emerald Consulting LLC, the price paid...
Redwood Trust plans to more than triple the dollar amount of non-agency jumbo mortgage-backed securities it issues this year compared with its issuance from 2012, according to comments this week from officials at the real estate investment trust. Redwood also plans to securitize conforming jumbos and even aggregate conforming loans to sell to Fannie Mae and Freddie Mac. The REITs goal for 2013 is to issue about $7.0 billion in non-agency MBS. While potential competitors struggled to ...
JPMorgan Chase is close to selling a non-agency jumbo mortgage-backed security, according to traders and jumbo executives familiar with the companys activities. Chase is treating the MBS as a test deal which has been delayed though it could close by the end of this month. A spokesman for Chase declined to comment on the matter but a source at the company confirmed that a deal is in the works. Chase might issue the deal as a private placement or the company might keep the security for its own portfolio and ...
The ability-to-repay rule from the Consumer Financial Protection Bureau will not have a negative impact on First Republic Banks originations of interest-only mortgages, according to James Herbert, chairman and CEO of the bank. Officials at Redwood Trust also said the rule is unlikely to impact its acquisition and securitization of IOs. If anything, First Republics Herbert said the new rule from the CFPB, which included harsher treatment for IO originations beginning in 2014, could help increase ...
Firms are looking to issue new non-agency mortgage-backed securities with looser representation and warranty standards than most post-crisis issuance, according to Fitch Ratings. The rating service issued a report this week critical of looser reps and warrants and pointed to Redwood Trust as an issuer with high standards for reps and warrants. We believe that transactions with these more aggressive rep and warranty provisions have the potential to weaken a transaction and effectively reduce ...
Federal regulators said they are nearly finished writing the final rule on risk retention in non-agency mortgage securitizations, including a revised definition for qualified residential mortgages. Issuance of the rule was delayed until the Consumer Financial Protection Bureau finished its ability-to-repay rule which set standards for qualified mortgages. QM coming out really now does allow us to finish it, Federal Reserve Governor Daniel Tarullo said of the risk-retention rule ...