Fitch: U.S. Prime Jumbo RMBS Issuance Rebounds

MBA NewsLink Staff

April 20, 2017

Fitch Ratings, New York, said prime jumbo residential mortgage-backed securities activity showed strong signs of improvement in the first quarter, more than doubling volume from a year ago.

The agency's U.S. Prime Jumbo RMBS Trends report said the first quarter saw six new prime jumbo RMBS transactions close, totaling $2.6 billion. Fitch said prime jumbo RMBS performance remains "excellent" through early 2017, reflecting the high quality of collateral attributes.

The first quarter also saw a new issuer, Galton Funding Mortgage Trust, which securitized a $254 million pool in March.

The report said of 50,000 outstanding loans, only 29 borrowers were 90 or more days delinquent.

Fitch Associate Director Ryan O'Loughlin said the increase in issuance last quarter was primarily driven by a tightening of bond spreads, which improved the economics of prime jumbo transactions.

The report noted prepayment speeds have slowed down over the past three months, resulting from a rise in interest rates following the U.S. election. Prime jumbo mortgage rates averaged 4.50 percent in the first quarter, more than 50 basis points higher than late last year.

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