Mortgage bankers originated $16.3 billion of jumbo loans in the first quarter, a 2% decline from the same period last year but a much stronger performance than the overall market, according to figures compiled by National Mortgage News.

The slight drop in these 'non-GSE jumbos' came during a quarter when all residential fundings fell dramatically, by 32%.

On the surface it appears that jumbo production is gaining an even bigger piece of the origination pie—but not because there is now a securitization market supporting the sector. The largest originators of jumbo loans—non-Fannie Mae/Freddie Mac jumbo loans, that is—are placing the mortgages on their balance sheets.

"There's not much of an incentive to sell them at this time," said Mike McMahon, an executive at the Mill Valley, Calif.-based Redwood Trust.

Also, some lenders note that they are beginning to see new entrants to the market. (For a complete ranking of jumbo lenders and additional analysis see the Monday weekly edition of NMN.)

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