Banks and thrifts increased their holdings of first-lien residential mortgages in the first quarter of 2012 compared with a year ago, according to the Inside Mortgage Finance Bank Mortgage Database. The 3.0 percent growth rate was partly due to originations of nonconforming mortgages, which helped offset portfolio runoff. Banks and thrifts held $1.74 trillion in first-liens in portfolio at the end of the first quarter. Among the top three bank portfolio lenders, only Wells Fargo ... [Includes one data chart]

Redwood Trust and the main lenders it sources mortgages from largely rank above average, according to new assessments by Moody’s Investors Service. Moody’s ranked Redwood Residential Acquisition Corp. above average as a jumbo aggregator based on the performance of Redwood’s collateral, lending practices, and operational stability. “In our view, Redwood has a stable, credit-savvy team with a sound lending philosophy that has successfully managed its way through the financial crisis,” the rating service said. Moody’s also ...

FHA production of mortgages with loan amounts exceeding $417,000 rose to $4.8 billion during the first three months of 2012, according to Inside FHA Lending’s analysis of FHA data. The FHA posted a significant 21.1 percent increase in agency jumbo production from the fourth quarter of 2011, offsetting the 17.9 percent drop in production year over year. The agency’s maximum loan limit remained at $729,750 in high-cost areas while those of its competitors, Fannie Mae and Freddie Mac, were at the lower $625,500. Purchase loans accounted for 42.4 percent of FHA jumbo originations in ... [1 chart]

Fannie Mae, Freddie Mac and the FHA generated a record $28.79 billion in conforming jumbo business – mortgages with loan amounts exceeding $417,000 – during the first three months of 2012, according to a new Inside Mortgage Finance analysis of loan-level data. The surge in agency jumbo production – up 34.7 percent from the fourth quarter – exceeded the 14.1 percent jump in overall Fannie, Freddie and FHA business. Conforming jumbo loans accounted for 7.5 percent of the $384.83 billion in securitization and mortgage insurance business done by the agencies in the first...(Includes three data charts)

Competition for non-agency jumbo originations is increasing, according to industry participants. The interest, largely from big banks looking to hold jumbos in portfolio and real estate investment trusts looking to securitize the assets, has led to a decline in interest rates.“All of a sudden it’s the asset of choice because big banks are uncomfortable with other assets, so they’re coming at jumbo home mortgages,” Jim Herbert, CEO of First Republic Bank, a lender that has long-focused on jumbos, said ... [Includes one data chart]

Mortgage industry participants support a new proposed definition of subprime consumer loans for banks with more than $10.0 billion in assets. However, some raised concerns that the Federal Deposit Insurance Corp.’s proposal could unnecessarily impact holdings of nontraditional mortgages. In March, the FDIC proposed a revised definition of “higher-risk” consumer, commercial and industrial loans and securities for the large bank pricing model, which determines deposit insurance rates. Instead of defining subprime loans based ...

BDO Consulting wa selected this week to serve as the primary professional firm to help oversee the recent $25.0 billion servicing settlement. More than 30 BDO professionals will work with the settlement’s monitor to oversee the settlement. BDO is a professional services firm providing assurance, tax, financial advisory and consulting services. The company has worked with large retail mortgage lenders and financial institutions, and conducted related assessments and investigations ... [Includes four briefs]

“There are a number of developments that are reflective of a more mature and fully functioning securitization market,” Brett Nicholas, president of Redwood Trust, said last week. Among other issues, he noted the recent jumbo mortgage-backed security issuance by a subsidiary of Credit Suisse Group. Nicholas’ remarks at the JMP Securities research conference last week were some of the first by Redwood officials regarding competition on jumbo MBS issuance. Until the $741.94 million issuance by Credit Suisse ...

Fannie Mae and Freddie Mac have made significant progress in recovering from the losses on the nonprime mortgages they purchased and guaranteed before 2009. In the first quarter of 2012, both of the government-sponsored enterprises touted that mortgages acquired in and after 2009 now account for the majority of their single-family holdings. The GSEs held a combined $386.01 billion in nonprime purchased/guaranteed mortgages as well as nonprime mortgage-backed securities at the end of the first quarter of 2012 ... [Includes one data chart]

Although mortgage delinquency rates have improved in recent quarters, industry participants say there are still plenty of opportunities to buy and sell distressed mortgages. Some $400 billion in nonperforming residential mortgages remain on U.S. banks’ balance sheets, according to estimates by officials at PennyMac Mortgage Investment Trust. “I don’t think we’ve come near working through this,” said Kevin Lahr, director of valuation services at Digital Risk. “We’re halfway through this, maybe.” Speaking at ...