First Republic Bank – the primary source of loans for Redwood Trust non-agency mortgage-backed securities – has received high marks for its jumbo originations. FRB’s originations are concentrated around San Francisco, largely for wealthy borrowers. After relying on CitiMortgage for all of the loans in its first post-bust non-agency MBS issuance, Redwood has relied heavily on FRB. The lender accounted for a slight majority of the four securities totaling $1.41 billion Redwood has issued in 2011 and at the beginning of 2012 ...

Shortly after being acquired by Capital One Financial, jumbo lender ING Direct announced last week that it will exit the wholesale business. However, Capital One stressed that the lender will continue to offer jumbos on a retail basis. ING Bank was the sixth-ranked non-agency jumbo lender in 2011, according to Inside Nonconforming Markets, with an estimated $5.04 billion in such originations. That was down 26.9 percent from the previous year. A spokesman for Capital One said exiting wholesale lending will allow Capital One to ...

Subprime lending standards appear to be loosening across numerous asset classes, including home loans, but it is still difficult for borrowers to get a subprime mortgage. Equifax recently reported that subprime originations have grown as of the end of 2011 compared with the end of 2010. The company’s National Consumer Credit Trends Report was produced with Moody’s Analytics, and included details on credit cards, auto finance, consumer finance, retail credit and student loans. “The evidence of increased lending to subprime consumers demonstrates banks’ ongoing efforts to ...

The $25 billion servicing settlement involving five major bank servicers was approved by the US District Court for the District of Columbia on April 4 without a formal challenge from the Association of Mortgage Investors or anyone else. The servicers and settlement monitor Joseph Smith will agree on deadlines to implement the settlement’s various provisions, with the deadlines to be set between 60 days after approval of the settlement and up to 180 days after approval ... [Includes four briefs]

The focus on foreclosure documentation on forward mortgages has set the stage for similar scrutiny on reverse mortgages, and the extra documentation required in a reverse mortgage adds to this challenge, according to compliance experts. In a recent legal analysis, Christopher Willis and Mercedes Kelly Tunstall, litigation attorney and of counsel at the Washington law firm Ballard Spahr, respectively, said reverse mortgage lenders and servicers could avoid many of the problems encountered by forward mortgages by examining their foreclosure process carefully and learning from ...

The Department of Housing and Urban Development has hired a new contractor to service Home Equity Conversion Mortgages and other secretary-held mortgage assets. Irving, TX-based Deval, LLC, officially took over from C&L Service Corp. as HUD’s new loan servicing contractor effective March 1. Servicers may assign loans through Deval once they reach 98 percent of the maximum claim amount. As part of its servicer duties, Deval will handle borrower inquiries, payoff requests for Hope for Homeowners mortgages, HECM servicer inquiries and certain HECM-related requests. In addition to assigned HECM loans, Deval will be ...

Non-agency MBS deals have been plagued in the last two to three years by increasing instances of gaps and mismatches between expected collateral cash flow and payouts to bond holders, according to analysts at Barclays Capital. Most of the mismatches are attributable to balance capitalization, modifications and advances, either stopped or recovered by the mortgage servicers. Since most of the discrepancies are due to the treatment of delinquent mortgages, the gaps are widest in subprime. Sporadic mismatches have been spotted in option ARMs and Alt A hybrid loans as well, the analysts said...

While the word “subprime” often brings housing loans to mind, a new study by Equifax shows that subprime borrowers seeking access to credit cards and auto financing are having an easier time. Lending to subprime consumers for bank credit cards increased 41 percent on a year-over-year basis, with the bankcard limits at their highest since 2008, while retail credit card limits grew 6 percent. Subprime borrowers now comprise 46 percent of the auto finance market, with loan amounts up 14 percent since 2010. Total new auto loan originations hit a six-year high in December 2011...

Two fair lending groups say 2011 data collected under the Home Mortgage Disclosure Act reveal that Citigroup, JPMorgan Chase, Wells Fargo and others continued making subprime mortgages last year in a way that had a disparate impact on minority borrowers. Fair Finance Watch said the raw data show that African American borrowers last year were 3.38 times more likely to get a so-called rate-spread loan (1.5 percentage points over Treasury yields) from Citigroup than white borrowers, worse than its 2.25 times disparity rate in 2009. Hispanic borrowers were 2.42 times more likely than whites to get a rate...

Redwood Trust has packaged its fourth non-agency jumbo MBS of the past two years and achieved the lowest credit-enhancement requirement during that span thanks largely to a more appealing geographic mix of properties backing the loans. Sequoia Mortgage Trust 2012-2 looks a lot like the three previous jumbo deals Redwood has issued in its solo effort to re-ignite the non-agency MBS market. In some ways, the collateral is slightly less pristine than some of the earlier transactions, although all four have been backed by very high quality prime loans. Credit enhancement for the AAA-rated classes is 7.15...