Efforts to reform the non-agency market may be gathering momentum as the Structured Finance Industry Group is set to reveal its preliminary recommendations for changes to non-agency mortgage-backed securities and comments on the sector’s reform are due to the Treasury Department shortly. Industry participants have plenty of suggestions for how to fix the market, but any revival looks to be years away. On Aug. 4, the SFIG will release “green papers” as part of its Project RMBS 3.0 initiative ...

Two Harbors Investment is preparing to issue a $267.67 million jumbo mortgage-backed security, according to a preliminary term sheet obtained by Inside Nonconforming Markets. The deal is scheduled to close Aug. 5, nearly a year after the only other jumbo MBS issued by Two Harbors. Agate Bay Mortgage Trust 2014-1 is backed by 30-year fixed-rate mortgages from a variety of lenders, led by RPM Mortgage with a 12.8 percent share, New York Community Bank ...

While banks have plenty of capacity to retain jumbo mortgages in portfolio, the top two contributors to jumbo mortgage-backed securities issued in the second quarter of 2014 were actually banks, according to a new ranking and analysis by Inside Nonconforming Markets. First Republic Bank and JPMorgan Chase were the top two contributors to the scant four jumbo MBS during the quarter. And since the start of 2013, three of the top five ... [Includes one data chart]

Officials at Ocwen Financial continue to indicate that the servicer is primed to grow, but the nonbank has been stymied since February due to a voluntary agreement with the New York Department of Financial Services. Henry Coffey, an analyst at Sterne Agee, said there appears to be ample interest from nonbank servicers to acquire servicing along with plenty of interest from banks to shift servicing to banks. However, he said there has been a drought in such transfers ...

The risk-retention standard federal regulators are leaning toward establishing isn’t what was intended under the Dodd-Frank Act, according to one of the main authors of the DFA. Barney Frank, a former Democrat congressman from Massachusetts, said aligning the definition for qualified mortgages with the definition for qualified residential mortgages would be a “grave error.” The DFA required federal regulators to establish standards for QRMs ...

Statebridge Company has received a mid-tier rating for subservicing mortgages from Fitch Ratings. The nonbank servicer was established in 2008 and is owned by FrontRange Capital Partners, along with Kevin Kanouff, Statebridge’s CEO and David McDonnell, the servicer’s managing director.As of the end of the second quarter of 2014, Statebridge subserviced $1.08 billion in mortgages, according to Fitch ... [Includes five briefs]

Subprime auto lending is just about back to the levels seen before the financial crisis, with increased ABS issuance volumes, somewhat higher credit losses and more credit enhancement to offset declining ABS credit quality, according to new research from Standard & Poor’s Rating Services. While newer subprime auto ABS have more credit risk, ratings are expected to remain stable. During an S&P webinar this week, Amy Martin, a senior director at the rating service, pointed out...

The conditional default rate, or annualized liquidations, of non-agency MBS loans rose 20 basis points to 4.92 percent in the second quarter, after declining for seven consecutive quarters from 9.76 percent in the second quarter of 2012, Fitch Ratings reported this week. “The recent turnaround in the trend can be partly attributed to a growing portion of bank-held real estate owned properties, which typically liquidate much faster than those that are still in the foreclosure process,” said Fitch. The rate of completed foreclosures to REO property has trended higher for four consecutive quarters. The previous decline in the CDR was driven...

The line of companies rolling out new loan menus for non-qualified mortgages is growing longer each week, but it remains to be seen which firm will be the first to issue a non-agency MBS. Citadel Servicing Corp., Irvine, CA, is working on a bond, but has been noncommittal about when it might come to market – and whether its first deal will be public or private. The privately-held nonbank is now funding more than $15 million a month in non-QM/nonprime products. Meanwhile, Impac Mortgage Holdings – an Alt A lender of yesteryear – has just entered...

Impac Mortgage recently launched a suite of products that don’t meet the Consumer Financial Protection Bureau’s standards for qualified mortgages. The non-QMs are available via the correspondent channel and are aimed at prime borrowers. The lender refers to its offerings as “Alt QMs,” including a jumbo option, a program for loans slightly outside of agency guidelines and a program that purposefully excludes analysis of a borrower’s tax returns ...