Prime Jumbo RMBS transactions in First Quarter of 2017

DSNews reports that according to a recently released Fitch report, the number of prime jumbo RMBS transactions has more than doubled over the last year. According to the report, prime jumbo transactions in the first quarter of 2017 totaled over $2.6 billion, more than double the volume from the same quarter in 2016. “The increase in issuance in early 2017 is primarily driven by a tightening of bond spreads, which has improved the economics of Prime Jumbo transactions,” Fitch stated in a release. Additionally, performance is good, with Fitch stating that “Prime Jumbo RMBS performance remains excellent through early 2017, reflecting the high quality of the collateral attributes, ” and that only 29 loans out of approximately 50,000 are currently delinquent by 90 or more days.

Other highlights from the report include a slowing of prepayment speeds; a 50-basis point jump in mortgage rates the previous quarter; and the entrance of a new issuer, Galton Funding Mortgage Trust, which securitized a pool worth $254 million last month. According to Fitch, rising rates are the cause of the slowdown in prepayments. “Prepayment speeds have slowed down over the last three months due to the rise in interest rates following the U.S. election,” the release stated. “Prime jumbo mortgage rates were at roughly 4.5 percent in early 2017, more than 50 basis points higher than late last year.”

SFIG will continue its advocacy to ensure that it addresses all areas where private capital plays a role in the housing finance market, with particular focus on the PLS market. Project RMBS 3.0 is an initiative of SFIG, established with the primary goal of re-invigorating the PLS market. If you would like to join the RMBS 3.0 Task Force, email

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