Flagstar Bank looks to have found an agreeable due diligence sampling rate for loans in its prime non-agency mortgage-backed securities. The company is preparing to issue a $476.1 million prime non-agency MBS, according to presale reports published last week. It’s the second issuance in a row from Flagstar where 30.0 percent of the loans were subject to third-party reviews. Only 20.0 percent of the loans in a $704.1 million deal Flagstar issued in April were subject to ...

Rating services are divided on whether the income documentation used by Caliber Home Loans qualifies as full documentation. The differences are apparent in a pending $342.6 million issuance from Lone Star Funds, which is stocked with mortgages from Caliber. According to Fitch Ratings, Lone Star is the only current issuer of nonprime MBS to keep mortgages with nontraditional income-documentation out of its deals. The rating service said 99.4 percent of the dollar volume of the loans ...

The Consumer Financial Protection Bureau should remove the cap on debt-to-income ratios that applies to certain qualified mortgages, according to a proposal by the Housing Finance Policy Center. Such a move could boost non-agency lending, according to industry analysts. The CFPB is currently assessing whether changes are needed for QM standards, including potentially addressing the so-called government-sponsored enterprise patch. The patch allows mortgages with DTI ratios ...

The 10-year anniversary of Fannie Mae and Freddie Mac entering conservatorship prompted an effusion of words regarding housing-finance reform and a draft of a new bipartisan bill in the House. It remains to be seen whether any of the talk turns into action in Congress, though administrative reform via the Federal Housing Finance Agency and the Treasury Department remains a possibility. Rep. Jeb Hensarling, R-TX, chairman of the House Financial Services Committee ...

The Securities and Exchange Commission levied $16.3 million in penalties against Moody’s Investors Service last week to settle charges involving internal control failures and failures to clearly define and consistently apply credit rating symbols. The bulk of the fine relates to more than 650 non-agency mortgage-backed security ratings issued between 2010 and 2013 that subsequently had to be corrected. Sens. Mark Warner, D-VA, and Mike Rounds ... [Includes four briefs]

Originations of jumbo mortgages were strong in the second quarter, with the sector gaining market share, according to a new ranking and analysis by Inside Nonconforming Markets. An estimated $80.0 billion of non-agency jumbos were originated in the second quarter, up 33.3 percent from the previous period. Total first-lien production increased by 17.1 percent in that span. Non-agency jumbos accounted for 18.0 percent of total originations in the second quarter ... [Includes one data chart]

Originations of expanded-credit mortgages failed to keep pace with total first-lien originations in the second quarter, according to a new ranking and analysis by Inside Nonconforming Markets. An estimated $11.40 billion of expanded-credit mortgages were originated in the second quarter, a 12.9 percent increase from the previous quarter. Total first-lien production increased by 17.1 percent during that time, according to Inside Mortgage Finance. Expanded ... [Includes one data chart]

Aggregators of jumbo mortgages have seen margins on their business decline as competition increases for the loans. Redwood Trust had $9.0 million in net income from its residential mortgage banking segment in the second quarter of 2018, down from $21.0 million in the previous period. Officials said the decline was due to lower margins during the second quarter. The real estate investment trust didn’t disclose specific figures other than to note that during the second quarter ...

The latest non-agency mortgage-backed security from JPMorgan Chase will include a higher share of conforming mortgages than the previous issuance from the firm. Chase is preparing to issue a $999.0 million MBS, according to presale reports from DBRS, Fitch Ratings and Moody’s Investors Service. Mortgages eligible for sale to the government-sponsored enterprises account for 65.1 percent of the collateral, amounting to $650.3 million. GSE-eligible mortgages ...

The $395.8 million nonprime mortgage-backed security Angel Oak Capital Advisors closed this week was met with strong demand from investors, according to the firm. “We believe that, relative to other recent [non-qualified mortgage] transactions, the tight pricing of AOMT 2018-3 demonstrates that investors have the confidence in and demand for the Angel Oak securitization program,” said Lauren Hedvat, a managing director of capital markets at Angel Oak. Pricing spreads ...