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Inside Nonconforming Markets

April 22, 2016

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TRID Issues Persist in Non-Agency Market; New MBS Avoids Liability Altogether

Relatively strong pricing for a jumbo mortgage-backed security issued at the end of March appears to have done little thus far to open the spigot for deals that include loans subject to the TRID mortgage disclosure rule. The $331.95 million Agate Bay Mortgage Trust 2016-2 was issued by Two Harbors Investment at the end of March. The deal included 43 mortgages subject to TRID, many of which had initial compliance exceptions. Analysts at Interactive Data said ... Read More

BofA, Chase Differ on Loans Not Sold to GSEs

Bank of America and JPMorgan Chase are using somewhat different strategies for conforming mortgages eligible for sale to the government-sponsored enterprises. Both banks are originating significant amounts of conforming mortgages and retaining some of the loans in portfolio instead of delivering them to the GSEs. BofA said its mortgage-banking income has declined due to holding mortgages in portfolio while Chase sold some of the credit risk on its conforming mortgage ... Read More

Caliber First to Receive ‘Expanded Credit’ Rating

Caliber Home Loans was assessed by Moody’s Investors Service as an originator of “expanded-credit” mortgages last week. Caliber is the first lender to receive a rating from Moody’s for expanded-credit mortgages, which could pave the way for the first rated non-agency mortgage-backed security that includes non-qualified mortgages. The rating service defined Caliber’s expanded-credit mortgages as non-agency mortgages that are not prime jumbo loans. Moody’s said ... Read More

Slight Movement in MBS Underwriting Trends

Underwriting standards on the four prime non-agency mortgage-backed securities issued in the first quarter of 2016 loosened marginally compared with the typical prime jumbo MBS issued in recent years, according to a new analysis by Inside Nonconforming Markets. The combined loan-to-value ratio on prime non-agency MBS issued in the first quarter of 2016 averaged 69.8 percent. That was somewhat higher than the average combined ... [Includes one data chart] Read More

LendingHome Expanding Non-Agency Activity

The company that claims to be the largest originator of mortgages via marketplace lending continues to work on offering nonconforming mortgage products, including non-qualified mortgages. LendingHome announced last week that it has originated more than $550 million in mortgages since 2014 via marketplace lending. Marketplace lenders connect borrowers with institutional investors and individual investors. LendingHome said its mortgage originations ... Read More

States Continue to Weigh Regulation of Servicers

More than a year after state regulators proposed prudential standards for nonbank servicers, there’s no specific timeframe for releasing final standards. Officials at the Conference of State Bank Supervisors note that they are hoping for a coordinated approach with federal entities to regulate nonbank servicers. In March 2015, the American Association of Residential Mortgage Regulators and CSBS proposed standards for nonbank servicers. The proposal included baseline ... Read More

Non-Agency MBS Investors Seen as Fickle

New reports suggest that government-backed mortgage markets provide better stability for the economy, while investors in non-agency mortgage-backed securities were faulted for abandoning the market after the start of the financial crisis. A paper published last week by economists at the Federal Reserve found that areas with high levels of participation from the government-sponsored enterprises and FHA had relatively lower unemployment rates, higher home sales ... Read More

News Briefs

First Republic Bank announced this week that it increased its minimum wage to $20 per hour. The bank, which focuses on originating jumbo mortgages, also introduced a purchase-mortgage product for borrowers in underserved minority neighborhoods. Officials at First Republic were unwilling to elaborate on the new initiatives beyond details provided in a press release. “First Republic has an active and significant commitment to building ... [Includes nine briefs] Read More

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