After issuing nonprime mortgage-backed securities with post-crisis record-breaking sizes, the latest deal from Lone Star Funds will be slightly smaller. The firm is set to issue a $401.21 million nonprime MBS this month, according to presale reports by DBRS and Fitch Ratings. COLT 2018-1 Mortgage Loan Trust follows a $426.18 million issuance from Lone Star in September. That was the largest nonprime MBS backed by post-crisis originations. All of the loans in the previous issuance ...

Institutional investors are getting more comfortable with non-qualified mortgages, according to Angel Oak Capital Advisors. The firm announced last week that it raised $291 million in capital commitments for a private credit fund that will focus on non-QMs. The initial fundraising goal for Angel Oak Real Estate Investment Fund I was $250 million, according to AOCA. Officials weren’t willing to disclose how the fund will invest in non-QMs, but it has been involved in non-agency ...

While mortgage originations overall declined through three quarters in 2017, production of adjustable-rate mortgages increased slightly from the same period in 2016, according to a new ranking and analysis by Inside Nonconforming Markets. An estimated $161.0 billion of ARMs were originated in the first three quarters of 2017, up 2.5 percent compared with 2016. Total mortgage originations declined by 10.1 percent in that span ... [Includes one data chart]

As the dust settles from tax reform legislation passed at hyper speed at the end of 2017, industry analysts project that demand for jumbo purchase mortgages will take a hit. The Tax Cuts and Jobs Act reduced the amount of new debt eligible for the mortgage interest deduction. For purchase mortgages taken out on Dec. 15, 2017, and beyond, only $750,000 of debt will be eligible for the interest deduction. Previously, the limit was $1.0 million. Additionally, deductions from federal taxes for ...

PennyMac Financial Services launched its broker origination channel this week. While the company hasn’t originated many jumbo mortgages in the past year, it said the broker channel “will provide opportunities to grow volumes in attractive segments,” including jumbos. Carrington Mortgage Services recently launched some nonprime products in its wholesale channel. The lender allows for credit scores as low as 500 and loan amounts up to ... [Includes five briefs]

Borrowers looking to convert home equity into cash could lean toward cash-out refinances rather than home-equity loans due to changes in the newly enacted tax bill.

Issuance of prime non-agency mortgage-backed securities will increase next year, according to predictions from various industry analysts. Some see a gradual increase while analysts at Kroll Bond Rating Agency said volume could double when including so-called expanded-prime MBS. Kroll said prime non-agency MBS issuance could hit nearly $20.0 billion in 2018. “Assuming that spread tightening across structured finance remains at or near current levels, execution may continue to favor ...

The correspondent share of jumbo originations has risen in the past year while the retail share declined, according to a new analysis by Inside Nonconforming Markets. The survey found that correspondent production accounted for 18.1 percent of jumbo originations in the third quarter of 2017, up from a 14.3 percent share in the third quarter of 2016. During that time, the retail share of the lenders’ jumbo production fell from 81.3 percent to ... [Includes one data chart]

Some 55.2 percent of the loans in JPMorgan Chase’s forthcoming $883.8 million non-agency mortgage-backed security will be eligible for sale to the government-sponsored enterprises. Chase has included conforming mortgages in previous non-agency MBS but usually in smaller amounts. The GSE-eligible mortgages were largely originated by Chase, along with some contributions from loanDepot. The GSE-eligible mortgages have an average balance of $536,992 ...

Holdings of residential first-lien mortgages by banks and thrifts increased again in the third quarter of 2017, according to a new ranking and analysis by Inside Nonconforming Markets. Banks and thrifts held first liens with a total unpaid principal balance of $1.99 trillion as of the end of the third quarter, up 1.1 percent from the previous quarter and a 3.3 percent increase from a year ago. First-lien holdings are dominated by three big banks: Wells Fargo ... [Includes one data chart]