Originations of higher-priced non-government mortgages increased by 11% in 2018. The loans can’t receive safe harbor QM status and many higher-priced mortgages are required to include escrow accounts. (Includes two data charts.)
Denial rates on jumbo mortgages varied in 2018. Denials of applications for purchase mortgages declined while those for refis increased. Denial rates also differed widely among banks and nonbanks. (Includes one data chart.)
Production of interest-only mortgages by a select group of lenders increased by more than 65% in the second quarter. Data from HMDA provides new insight on the characteristics of IO borrowers. (Includes data chart.)
Servicing portfolios stocked with jumbo mortgages continued to steadily increase in the second quarter. However, portfolio growth at the top two servicers hasn’t kept pace with the market overall.
Servicing portfolios at most of the major subprime servicers are shrinking, except at Citadel Servicing. The firm has more than doubled its servicing portfolio in the past year.
Among the top five states for originations of non-agency jumbos in 2018, production increased only in Florida on an annual basis. California remains the top state for jumbo lending.
The top correspondent sellers of jumbo mortgages vary in where they sell loans. About half of sales in 2018 were to banks, about a third went to nonbanks and the rest was delivered directly to non-agency MBS.
Jumbo originations increased across channels in the first half of 2019. The correspondent channel lost a little bit of market share while retail remained the dominant source of jumbo production.
Originations of non-agency jumbo mortgages increased in the second quarter, spurred by low interest rates. The sector gained market share and some lenders said pipelines were strong heading into 3Q19.
Quicken increased its contributions to prime non-agency MBS this year, including $619 million of loans going into deals issued in the second quarter. Characteristics of the deals were largely unchanged.
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