A total of $12.41 billion of non-agency MBS were issued during the third quarter of 2016, according to a new Inside MBS & ABS analysis, but the market continued to rely heavily on a mix of recycled collateral and niche transactions. Overall issuance was up 78.3 percent from the second quarter, including big gains in prime MBS production and re-securitization deals. That still left year-to-date issuance off 43.9 percent from the first nine months of 2015. The huge jump in prime MBS production is...[Includes three data tables]

JPMorgan Chase and Redwood Trust remained the only two active issuers of prime non-agency mortgage-backed securities as of the end of the third quarter of 2016, according to a new ranking and analysis by Inside Nonconforming Markets. A total of $4.07 billion in prime non-agency MBS was issued during the third quarter of 2016, more than five times the volume issued in the previous quarter. However, through three quarters this year, prime MBS issuance ... [Includes one data chart]

The share of adjustable-rate mortgages held in portfolio hit an exceptionally high level in the second quarter of 2016, according to a new analysis by Inside Nonconforming Markets. An estimated $53.00 billion in ARMs were originated in the second quarter of 2016 and $4.69 billion in ARMs were included in mortgage-backed securities issued during the period. The ARM securitization rate in the second quarter was 8.8 percent, down from 13.9 percent ... [Includes two data charts]

The sample deal-agent agreement released by non-agency industry participants in September aims to provide a template for a third party that would protect investors in future non-agency mortgage-backed securities. Some industry participants warn that there are still more issues that need to be addressed, including a potential overlap in the duties for a deal agent and tasks traditionally handled by trustees and master servicers. At the recent ABS East conference produced by ...

JPMorgan Chase is set to end another lull in the issuance of jumbo mortgage-backed securities. The $395.40 million JPMorgan Mortgage Trust 2016-3 is scheduled to be issued next week, according to a presale report from Fitch Ratings. The most recently issued jumbo MBS priced in mid-August and was also from Chase. Only two firms with active conduits have issued jumbo MBS this year: Chase and Redwood Trust. Two Harbors Investment and WinWater Home Mortgage issued ...

Originations of interest-only mortgages increased significantly in the second quarter of 2016, particularly at PHH Mortgage, according to a new ranking by Inside Nonconforming Markets. A group of 12 lenders had $12.65 billion in IO originations in the second quarter, up 44.7 percent compared with the previous quarter. A large amount of the increase in volume was driven by PHH, which more than doubled its IO originations in that span. PHH had $6.25 billion ... [Includes one data chart]

The nonprime mortgage-backed security issued last week by Lone Star Funds priced at tighter spreads than the deal the company issued in June, indicating increased demand among investors. The $217.00 million COLT 2016-2 was also larger than the previous $161.40 million deal from Lone Star. According to Deutsche Bank Securities, spreads of A-1 tranche and A-2 tranche in COLT 2016-2 were respectively priced at 130 basis points and 175 bps, significantly tighter than ...

An investor-led group of participants in the non-agency mortgage-backed security market released a sample deal-agent agreement last week. The investors said the agreement can help reform non-agency MBS practices and increase issuance. Some investors have balked at buying new non-agency MBS until significant reforms are put in place. As early as July 2008, the American Securitization Forum started work on reforming the market and the Structured Finance Industry Group ...

Originations of non-qualified mortgages could reach $100.0 billion a year, according to officials at three prominent nonprime lenders. Since QM standards from the Consumer Financial Protection Bureau took effect at the start of 2014, non-QMs such as jumbo mortgages with interest-only terms have predominantly gone to affluent borrowers. However, officials at Angel Oak Mortgage Solutions, Deephaven Mortgage and Citadel Servicing see promise in originations for ...

Sterling Bank & Trust does limited income documentation under its bank statement program but the bank said there have been zero delinquencies on the nearly $1.00 billion in such loans the bank has funded in the past five years. Some $33.2 million in loans from Sterling’s Advantage Home Ownership Program were included in the $217.0 million non-agency mortgage-backed security issued by Lone Star Funds last week. Rating reports on the MBS by DBRS and Fitch Ratings provided ...