As interest rates increase and refinance business shrinks, some lenders are putting an emphasis on non-qualified mortgages. “CashCall Mortgage’s business in refinance has fallen off; it is now targeting a different section of the marketplace,” Joe Tomkinson, chairman and CEO of Impac Mortgage Holdings, said during the nonbank’s recent earnings call. “Now we are bringing a product that is very real estate friendly to the marketplace, and we will see an increase in that.” Most of ...

Freddie Mac is preparing to issue a $639.91 million Whole Loan Securities transaction backed by conforming-jumbo mortgages, according to Moody’s Investors Service. Some 65.9 percent of the mortgages in the transaction were originated by Caliber Home Loans, followed by Wells Fargo Bank with a 19.1 percent share and Quicken Loans with a 10.0 percent share. JPMorgan Chase recently opted to include conforming-jumbo mortgages in a non-agency ... [Includes five briefs]

The two major players in the jumbo mortgage-backed security market have seen strong demand for their issuance in recent months. But much broader factors are likely to limit issuance, including ongoing uncertainty regarding reform of the government-sponsored enterprises. Marc Simpson, an executive director at JPMorgan Securities, said 50 investors bought into the bank’s latest jumbo MBS, a $1.03 billion issuance. He said it was a “highwater mark,” as 20 to 30 investors typically ...

A planned nonprime mortgage-backed security from an affiliate of Angel Oak Companies received AAA ratings from DBRS and Fitch Ratings. The $146.47 million deal will include credit enhancement of 46.65 percent on the senior tranche. Fitch said the AAA rating for the deal reflects the satisfactory operational review of the contributing lenders conducted by the rating service, 100.0 percent loan-level due diligence review with no material findings, a “Tier 2” representation-and-warranty framework ...

An affiliate of Galton Funding is preparing to issue a jumbo mortgage-backed security with looser underwriting standards than the super-prime deals that have dominated the jumbo market since the financial crisis. DBRS and Moody’s Investors Service assigned AAA ratings to the planned $254.55 million Galton Funding Mortgage Trust 2017-1. The senior tranche of the MBS will include credit enhancement of 13.50 percent, which is much higher than the 5.00 percent credit enhancement ...

Most major jumbo servicers increased their portfolios in 2016, according to a new ranking and analysis by Inside Nonconforming Markets. A group of 30 servicers handled an estimated $921.10 billion in jumbo mortgages as of the end of the year, up 8.7 percent from the end of 2015. Wells Fargo was the top jumbo servicer, with a $279.97 billion portfolio at yearend. While Wells steadily built up its jumbo servicing throughout the year, it lost some ... [Includes one data chart]

Documents have been drawn up to define a deal agent’s responsibilities, a number of firms are willing to be deal agents for new non-agency mortgage-backed securities and some investors insist that the investor-friendly role is necessary. But a deal agent has yet to be included in an MBS. Dmitri Rabin, a vice president of Loomis, Sayles & Company, an investing firm that has pushed the deal-agent concept, conceded that the function doesn’t provide much value in the current environment ...

The two issuers that recently entered the non-agency mortgage-backed security market included loans originated by lenders that haven’t been significant contributors to nonprime MBS or jumbo MBS. The $145.02 million nonprime MBS from Invictus Capital Partners included mortgages from 21 lenders, led by Calculated Risk Analytics with a 26.1 percent share of the dollar volume of loans in the deal. Calculated Risk Analytics does business as Excelerate Capital, a wholesale lender ...

The total unpaid principal balance of subprime mortgages outstanding continued its slow decline in 2016, ending the year at an estimated $255.0 billion, according to Inside Nonconforming Markets. Subprime performance was mixed in the fourth quarter, with the share of loans past due increasing compared with the previous quarter, according to the Mortgage Bankers Association. Some 14.28 percent of mortgages were past due as of the end of the ... [Includes one data chart]

Potential mortgage borrowers with bad credit or no credit should proceed with caution if they have been offered a subprime mortgage, according to advice from the Consumer Financial Protection Bureau. The CFPB published a blog post this week focusing on the homebuying process for people with “poor” credit scores. The post, part of a series on home purchase advice, was authored by Megan Thibos, a policy analyst with the CFPB’s mortgage markets team. The post suggested that ...