Private-label

Wells Fargo’s first private-label mortgage securitization since the financial crisis doesn’t break any new ground — and that’s probably the point.

New investor appetite for mortgages over $1 million is motivating more nonbank lenders to offer super jumbo loans, often with weaker credit terms than traditional banks.

Fannie Mae and Freddie Mac enjoy considerable advantages because of their lower cost of capital and significant government subsidies. But with some conforming loans, the private market is finding a way to compete.

Lauren Hedvat, Angel Oak's managing director of capital markets, said that the rising non-qualified mortgage volume in the market has expanded the number of third-party origination loan packages for purchase.

Impac Mortgage Holdings will sell up to $600 million of non-qualified mortgage loans to Starwood Property Trust over the next 12 months that will be securitized.

Since its inception, the qualified mortgage rule has been synonymous with loans purchased by Fannie Mae and Freddie Mac or guaranteed by government agencies. But a broader QM definition could change that by creating more competitive private-label options.

Anticipated changes to the qualified mortgage rule will give lenders more options and force them to rethink their views on risk.

The $446 million Pearl Street Mortgage Company 2018-1 Trust is backed by 30-year, fixed-rate loans with credit characteristics in line with recent private-label prime jumbo transactions rated by Fitch Ratings.

A new due diligence firm created by a trio of former Clayton Holdings executives wants to shake up a static business model.

Some commercial buildings that are not required to obtain earthquake insurance may still be susceptible to significant structural damage that could put the borrowers at risk of default, according to Kroll Bond Rating Agency.

That’s an about-face from the bank’s previous transaction, completed in October, which was backed by fixed-rate mortgages, nearly half of which were underwritten to standards for purchase by Fannie Mae or Freddie Mac.

Many of the prime jumbo loans backing the transaction, JP Morgan 2017-4, were contributed by originators with limited history in that product, according to DBRS.

Hurricane Irma could potentially affect more private-label mortgage securities collateral than any other recent storm.

American International Group is accessing the securitized market through a Credit Suisse deal backed by loans that were generally originated less than a year after TRID.

American International Group Inc. could securitize through a unit it has previously used to buy jumbo loans.