JPMorgan Chase is increasing its issuance of jumbo MBS backed by loans with relatively high LTV ratios. Meanwhile, Flagstar Bank is contributing loans to a jumbo MBS from Goldman Sachs.
The correspondent share of jumbo originations declined in the first quarter of 2019 after reaching relatively high levels in the second half of 2018. The retail channel remained the main source of production while brokers gained market share.
The trade group is urging the CFPB to allow jumbos to receive qualified mortgage status even if the loans have debt-to-income ratios greater than 43%. The pending expiration of the QM patch has also prompted a back-and-forth among think tanks.
Originations of non-agency jumbo mortgages declined by 1.5% in the first quarter though the sector gained some market share as total first-lien originations fell by an even greater amount.
Issuance of prime non-agency MBS has slowed significantly. A pending deal from Wells Fargo is only the second issuance of 2Q19, though industry participants suggest that demand from investors is increasing.
Issuance of expanded-credit mortgage-backed securities hit $5.97 billion in the first quarter of 2019, a record for the sector. It also topped prime non-agency MBS volume for the third consecutive quarter.
The correspondent channel expanded its share of jumbo originations in 2018, according to an Inside Nonconforming Markets analysis of survey responses to affiliated Inside Mortgage Finance. [Includes one data chart.]
The representations and warranties provided on new non-agency mortgage-backed securities are receiving renewed attention from industry participants. Issuers of prime jumbo and expanded-credit MBS, particularly, have been subject to criticism.
The amount of jumbo mortgage servicing handled by the top servicers increased at a much faster rate in 2018 than the total amount of outstanding residential mortgages, according to a new ranking and analysis by Inside Nonconforming Markets. [Includes one data chart]
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