Production of interest-only mortgages by a select group of lenders increased by more than 65% in the second quarter. Data from HMDA provides new insight on the characteristics of IO borrowers. (Includes data chart.)
In comments on ways to address the end of the qualified mortgage patch, the Treasury suggested using a bright-line test while Redwood cautioned against using a metric based on the interest rate of a mortgage.
Among the top five states for originations of non-agency jumbos in 2018, production increased only in Florida on an annual basis. California remains the top state for jumbo lending.
The top correspondent sellers of jumbo mortgages vary in where they sell loans. About half of sales in 2018 were to banks, about a third went to nonbanks and the rest was delivered directly to non-agency MBS.
Refinances of jumbo mortgages increased significantly in the second quarter and accounted for 35.5% of total jumbo originations. Industry participants expect refi volume to remain elevated.
Jumbo originations increased across channels in the first half of 2019. The correspondent channel lost a little bit of market share while retail remained the dominant source of jumbo production.
Originations of non-agency jumbo mortgages increased in the second quarter, spurred by low interest rates. The sector gained market share and some lenders said pipelines were strong heading into 3Q19.
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