BENEFIT OF LOAN: mortgage

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Friday, 2 August 2013

Need for Mortgage Insurance Among New Residential Construction Market Eliminated by BurkeyLoan Program from Carpe Aquam Capital

Today, Carpe Aquam Capital LLC announced it will launch a BurkeyLoan program for the new residential construction market. Expanding on its trademarked, The More Affordable Mortgage, the program will eliminate the need for mortgage insurance and dramatically increase buying power for consumers with good credit.

The new residential construction market is sensitive to changes that increase monthly mortgage payments. In the face of rising interest rates the combination of BurkeyLoan structure and elimination of the mortgage insurance premium can increase homeowner buying power upwards of 25% while maintaining and in some cases reducing lender/investor exposure. The program will be available to banks and their builder customers in the new construction market.

The BurkeyLoan is a method of separating the risk characteristics of a loan into transparent and distinguishable tiers based on LTV that investors buy. It differs from pooling, the current process of mortgage securitization, through which all loan tiers and risk are aggregated. The BurkeyLoan was originally developed as a residential mortgage loan solution that enabled lenders to refinance negative equity mortgages and reduce monthly payments, often by as much as fifty percent.

Carpe Aquam Capital LLC is a financial service company that is committed to transforming the mortgage market and building a clear path to a new housing finance system. The Company does not directly originate loans from consumers or non-risk intermediaries. The BurkeyLoan program is only available to state and federal governments, banks chartered by them and select financial institutions. BurkeyLoan and The More Affordable Mortgage are registered trademarks of Carpe Aquam Capital LLC.

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Weekly mortgage applications: Why you should pay attention (Part 4)

The MBA Refinance Index fell for the seventh straight week

The Refinance Index fell to 3.8% (to 2,247 from 2,336) even though the average 30-year fixed-rate mortgage was flat at 4.35%. The ten-year bond yield rose 8 basis points. The bond market has been re-adjusting to the idea that we may see the end of quantitative easing in fall. That said, it seems to have stabilized at these levels, at least for the moment.

MBA reported that the share of refinance applications dropped to 63%. Most originators are anticipating a more purchase-driven market going forward and believe we’ve seen the lows in interest rates. If we have in fact seen the lows in interest rates, home price appreciation will drive refinance activity more as previously underwater homeowners eventually get back to positive equity and take advantage of lower rates. Slowing refinance activity could be a negative for originators like PennyMac (PMT) and Redwood Trust (RWT).

Implications for mortgage REITs

Refinancing activity affects prepayment speeds, which is a critical driver of mortgage REIT returns. Prepayment speeds occur because homeowners are allowed to pay off their mortgage early, without penalty, and when interest rates fall, those who can refinance at a lower rate do. This is good for homeowners. However, it isn’t necessarily good for mortgage lenders—especially REITs. When homeowners prepay, the investor loses a high-yielding asset and is forced to re-invest the proceeds in a lower-rate investment. This means lower returns going forward. A rise in prepayment speeds could negatively affect REITs, like American Agency Capital Corp. (AGNC), Annaly Capital Management, Inc. (NLY), Hatteras Financial Corp. (HTS), CYS Investments, Inc. (CYS), and Capstead Mortgage Corporation (CMO). That said, the increase in rates has basically put prepayment worries on the back burner for the REITs.

However, as rates increase, prepayments become less of a problem for REITs. But increasing rates bring their own set of problems, and REITs face mark-to-market hits on their portfolio and must adjust their hedges to a more volatile interest rate environment. Mortgage-backed securities outperform in stable interest rate environments, but they’re highly vulnerable to interest rate shocks.

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Owens Realty Mortgage, Inc. Announces $9.625 Million Capital Deployment

Owens Realty Mortgage, Inc. (NYSE MKT: ORM) announced today that it has closed a $9.625 million senior trust deed investment secured by an industrial office building located in the greater San Francisco Bay area. The investment is a five-year, interest-only loan with an interest rate of 10%, with a 6% pay rate for the first nine months and deferred interest due at maturity.

William Owens, the Chief Executive Officer, commented, "We are very pleased with this opportunity to provide a customized financing structure that addressed the unique requirements of the borrower and will make a valuable addition to our portfolio. This transaction is another example of our ability to provide lending solutions with speed and flexibility."

About Owens Realty Mortgage, Inc.

Owens Realty Mortgage, Inc., a Maryland corporation, is a real estate investment trust that invests in commercial real estate mortgage loans primarily in the Western U.S. The Company specializes in unconventional loans that require speed and flexibility. Owens Realty Mortgage, Inc., is headquartered in Walnut Creek, California, and is externally managed and advised by Owens Financial Group, Inc.

Additional information can be found on the Company's website at http://www.owensmortgage.com.

Forward-Looking Statements

This press release includes "forward-looking statements" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Actual results may differ from expectations, estimates and projections and, consequently, readers should not rely on these forward-looking statements as predictions of future events. Words such as "expect," "target," "assume," "estimate," "project," "budget," "forecast," "anticipate," "intend," "plan," "may," "will," "could," "should," "believe," "predicts," "potential," "continue," and similar expressions are intended to identify such forward-looking statements. These forward looking statements made in this release include, but may not be limited to the Company's expectations regarding the performance of its business and the yield on its investments.

Readers are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made. The Company does not undertake or accept any obligation to release publicly any updates or revisions to any forward-looking statement to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based. Additional information concerning these and other risk factors is contained in the Company's most recent filings with the Securities and Exchange Commission. All subsequent written and oral forward looking statements concerning the Company or matters attributable to the Company or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above.

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Weekly mortgage applications: Why you should pay attention (Part 1)

Every week, the Mortgage Bankers Association (MBA) puts out an index of mortgage application activity

Mortgage applications are relevant to a number of industries—from banks to non-banks, to mortgage REITs to homebuilders. This series will break down the different indices and help you learn what insight you can glean from them. If you’re a bank, you’re looking at these indices and trying to determine whether you’re competitive in all the segments you want to be competitive in. If you’re a non-bank, you might be looking to see if you’re gaining share or losing share. If you’re a mortgage REIT, you’re focusing on the refinance index and what it might mean for prepayments going forward. And if you’re a homebuilder, you’re watching the purchase index as a way to gauge future demand.

This series will look at the three main MBA indices.

We’ll start with the basic MBA Mortgage Applications Index.

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Underwater Mortgage Numbers A Misleading Statistic

If you are looking to buy a home in Maryland or Virginia, statistics showing the number of underwater mortgages in a particular area could be a little off-putting. There are times when statistics are important, and times when they are not. This is one of those situations where the statistics could perhaps be ignored.

Why so? Underwater mortgages only tell you one thing – homes were once worth a lot more than they are now. Underwater mortgage statistics don’t necessarily relate to foreclosures or short sales. In fact, there are tens of thousands of home owners around the nation who have no idea what their homes true value is today. Their mortgage may well be underwater, however, these home owners are oblivious to that fact until it comes time to sell – then they may get a rather rude shock.

Statistics are just numbers and they are constantly moving. There are areas in both Maryland and Virginia where mortgages were underwater two or three months ago. Today, those home owners have equity – not much, but they do have equity. If you are looking at statistics prior to buying, look instead at days on the market, the number of foreclosures completed, or about to commence. The number of short sales and bank owned sales is also worth consideration. High numbers across those statistics could reduce home values.

At the same time, forward numbers that indicate a reduction in those numbers, for example, few foreclosures expected, could indicate a stabilization of the market in that area. Statistics are a valuable tool, however, when you read scary numbers such as 30% of homes in a particular area are underwater, ignore them – unless of course they mean the homes are literally underwater – if that’s the case, you would hope the home owner has good flood insurance.

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Mercurial Mortgage Rates to Stabilize Soon, Analysts Say

While rates on home loans are likely to remain modest by traditional standards, the ultralow borrowing costs that encouraged millions of homeowners to refinance and helped revive the moribund housing market are quickly becoming a memory. As yields on 10-year government bonds rise amid signs that the economy is improving and that the Federal Reserve will reduce bond purchases, mortgage rates have quickly followed.

Rates on 30-year fixed mortgages hit 4.25 percent on Thursday, up from 4.12 percent on Wednesday morning before the Fed chairman, Ben S. Bernanke, signaled the central bank might begin easing back on stimulus efforts later this year. As recently as May, the average interest rate on a 30-year fixed mortgage stood at 3.5 percent, close to the lowest in decades.

While mortgage rates are moving higher, rates on other forms of credit like car loans, home equity loans and credit cards are not expected to budge. They are either already set at relatively high levels, like most credit card borrowing costs, or tied to short-term interest rates, which the Fed has indicated will not rise before 2015. For example, the rate on a five-year car loan currently is just over 4 percent, about where it was in mid-May. Similarly, a fixed-rate home equity loan carries a rate of 6.1 percent, not far from where it was a month ago.

But the fact that the Fed is keeping the short-term bank lending rate it controls at close to zero also means that savers will not see any improvement in the paltry interest paid on savings accounts at banks, money market accounts and short-term certificates of deposit, which are also tied to short-term rates.

By contrast, long-term rates are rising because the central bank’s current program of purchasing $85 billion a month in Treasury securities and mortgage bonds is expected to start tapering off later this year, if the economy continues to recover. Despite the sudden jump in long-term borrowing costs, some experts say it is unlikely that government bond rates will keep spiking from current levels, and could actually ease slightly.

“Mortgage rates tend to move a lot in a short amount of time, then do nothing for a longer period,” said Greg McBride, senior financial analyst at Bankrate.com, a personal finance Web site. “Rates will stabilize and potentially pull back as Bernanke’s words fade and economic reality sets in.”

Nor should holders of adjustable-rate mortgages panic. “Someone who already has one doesn’t have to worry until the Fed starts raising short-term rates,” Mr. McBride said.

Still, the recent move upward in mortgage rates signals the beginning of a longer-term trend of higher borrowing costs for home buyers, which had reached lows not seen in decades.

“Clearly, mortgage rates and bond yields will be higher in the long run than they are today,” Mr. McBride said, adding that he expects borrowing costs on 30-year fixed mortgages to hover in the 4 to 4.5 percent range for the rest of the year. “I don’t think rates will go back below 4 percent,” he said.

Even if mortgage rates do move higher than that, they will still be well below the levels that prevailed as recently as 2007, before the recession and the financial crisis. Between 2000 and 2007, rates averaged 6.5 percent on 30-year mortgage notes.

“I don’t think this foreshadows a huge rise in rates but there will be more volatility in the fixed-income markets than we’ve seen recently,” said Brian Rehling, chief fixed-income strategist at Wells Fargo Advisors.

Mr. Rehling predicts yields on 10-year Treasury bonds, the benchmark for pricing mortgages, to be at 2.25 percent at the end of this year, slightly below where they finished the day on Thursday, at 2.42 percent. Paul Edelstein, director of financial economics at IHS Global Insight, also expects yields to stabilize. “I’m being cautious,” he said. “Rates are going to be higher than I thought last month but I’m not sure the rates we are seeing today will be sustained throughout the rest of the year.”

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Mandate National Mortgage Corporation - Second Quarter 2013 Dividend

Revenue for the three months ending June 30, 2013 decreased 31.1% to $151,251 from $219,579 in 2012. Second quarter net income decreased 8.4% to $106,646 or $.162 per share compared with $116,381 or $.163 per share for the same period in 2012.

Return on Common equity was 7% while return on Preferred shares was 6.5%.

Mandate operates as a mortgage investment corporation under the provisions of the Income Tax Act (Canada) and invests in a diverse portfolio of residential and commercial mortgages. Mandate has provided and intends to continue to provide a high dividend yield to its shareholders through its prudent mortgage lending policy. It has been among the top performing mortgage funds for the past twenty years as reported in the financial press. Mandate distributes quarterly all of its earned income to its shareholders by way of dividend.

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Mandate National Mortgage Corporation - Second Quarter 2013 Dividend

On behalf of the Board of Directors of Mandate National Mortgage Corporation ("Mandate"), Mr. Alan E. R. Long, President, is pleased to announce the dividend payment rate to shareholders of record as at June 30, 2013 is $0.1615 per share and will be paid August 15, 2013.

Return on Common equity was 7% while return on Preferred shares was 6.5%.

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Need for Mortgage Insurance Among New Residential Construction Market Eliminated by BurkeyLoan Program from Carpe Aquam Capital

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Financial Services Commission of Ontario Issues Interim Orders Against Mortgage Lenders Ltd. and Ralph Iacono

TORONTO , July 30, 2013 /CNW/ - The Superintendent of Financial Services for the Financial Services Commission of Ontario (FSCO) has issued an Interim Compliance Order against Ralph Iacono and Mortgage Lenders Ltd. and an Interim Suspension Order against Mortgage Lenders Ltd. ordering them to immediately cease carrying on mortgage brokering business in Ontario and holding themselves out as doing so.

The Superintendent has grounds to believe that Mr. Iacono is dealing in mortgages without a licence on behalf of Mortgage Lenders Ltd. It is alleged that the clients of Mortgage Lenders Ltd. are at risk because Mr. Iacono 's dealings with them contravenes the Mortgage Brokerages, Lenders and Administrators Act, 2006 (the Act). The Act requires Ontario's mortgage brokerages, administrators, brokers and agents to be licenced and holds them to specific standards. In addition, it is alleged that Mr. Iacono 's ongoing mortgage activities are in defiance of an Order of the Superintendent dated December 5, 2012 , which revoked Mr. Iacono 's mortgage broker licence.

The Act allows the Superintendent to make an interim order when the interests of the public may be adversely affected by any delay in making a compliance or revocation order.

The interim orders against Mortgage Lenders Ltd. and Mr. Iacono will expire in 21 days if the Superintendent does not make a notice of proposal to make a permanent order in either matter.

Every individual convicted of an offence under the Act, including not complying with an interim order, is liable to a fine of up to $100,000.00 , imprisonment for up to a year, or both. Every corporation convicted of an offence under the Act is liable to a fine up to $200,000.00 .

FSCO investigates allegations of misconduct, unfair practices and non-compliance with legislation or regulations in its regulated sectors. When warranted, FSCO takes enforcement action.

FSCO is an agency of the Ministry of Finance established under the Financial Services Commission of Ontario Act, 1997. It regulates insurance, pension plans, loan and trust companies, credit unions and caisses populaires, co-operative corporations and mortgage brokerages and administrators in Ontario.

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Fitch Rates Sequoia Mortgage Trust 2013-10

--$371,622,000 class A-1 exchangeable certificate 'AAAsf'; Outlook Stable;
--$185,811,000 class A-2 certificate 'AAAsf'; Outlook Stable;
--$185,811,000 class A-3 certificate 'AAAsf'; Outlook Stable;
--$185,811,000 class A-4 exchangeable certificate 'AAAsf'; Outlook Stable;
--$185,811,000 class A-5 exchangeable certificate 'AAAsf'; Outlook Stable;
--$185,811,000 class A-6 exchangeable certificate 'AAAsf'; Outlook Stable;
--$185,811,000 class A-7 exchangeable certificate 'AAAsf'; Outlook Stable;
--$371,622,000 class A-8 exchangeable certificate 'AAAsf'; Outlook Stable;
--$185,811,000 class A-IO1 notional certificate 'AAAsf'; Outlook Stable;
--$185,811,000 class A-IO2 notional certificate 'AAAsf'; Outlook Stable;
--$185,811,000 class A-IO3 notional certificate 'AAAsf'; Outlook Stable;
--$371,622,000 class A-IO notional certificate 'AAAsf'; Outlook Stable;
--$10,217,000 class B-1 certificate 'AAsf'; Outlook Stable;
--$6,811,000 class B-2 certificate 'Asf'; Outlook Stable;
--$4,608,000 class B-3 certificate 'BBBsf'; Outlook Stable;
--$3,205,000 non-offered class B-4 certificate 'BBsf'; Outlook Stable.

The 'AAAsf' rating on the senior certificates reflects the 7.25% subordination provided by the 2.55% class B-1, 1.70% class B-2, 1.15% class B-3, 0.80% non-offered class B-4 and 1.05% non-offered class B-5. The $4,208,564 non-offered class B-5 certificates will not be rated by Fitch.

Fitch's ratings reflect the high quality of the underlying collateral, the clear capital structure and the high percentage of loans reviewed by third party underwriters. In addition, CitiMortgage, Inc. will act as the master servicer and Wilmington Trust will act as the Trustee for the transaction. For federal income tax purposes, elections will be made to treat the trust as one or more real estate mortgage investment conduits (REMICs).

SEMT 2013-10 will be Redwood Residential Acquisition Corporation's tenth transaction of prime residential mortgages in 2013. The certificates are supported by a pool of prime fixed rate mortgage loans. All of the loans are fully amortizing. The aggregate pool included loans originated from PrimeLending (8.5%) and WJ Bradley Mortgage Capital (7.6%). The remainder of the mortgage loans was originated by various mortgage lending institutions, each of which contributed less than 5% to the transaction.

As of the cut-off date, the aggregate pool consisted of 529 loans with a total balance of $400,671,564; an average balance of $757,413; a weighted average original combined loan-to-value ratio (CLTV) of 68.1%, and a weighted average coupon (WAC) of 3.9%. Rate/Term and cash out refinances account for 45.5% and 5.0% of the loans, respectively. The weighted average original FICO credit score of the pool is 775. Owner-occupied properties comprise 95.2% of the loans. The states that represent the largest geographic concentration are California (40.9%), Texas (9.4%) and Virginia (6.7%).

KEY RATING DRIVERS

High-Quality Mortgage Pool: The collateral pool consists of 30-year fully amortizing, fully documented FRMs to borrowers with strong credit profiles, low leverage, and substantial liquid reserves. Third-party loan-level due diligence was conducted on 99.8% of the pool, and Fitch believes the results of the review generally indicate strong underwriting controls.

Originators with Limited Performance History: The majority of the pool was originated by lenders with limited non-agency performance history. The lack of performance history is partially mitigated by the 100% third-party diligence conducted on these loans that resulted in immaterial findings. Fitch also considers the credit enhancement (CE) on this transaction sufficient to mitigate the originator risk.

Geographically Diverse Pool: The collateral pool is geographically diverse. The percentage in the top three metropolitan statistical areas (MSAs) is 23.1% and concentration in California is 40.9%, similar to recent SEMT transactions. The agency did not apply a default penalty to the pool due to the low geographic concentration risk.

Transaction Provisions Enhance Deal Framework: The representation, warranty and enforcement mechanism framework is viewed positively, as it is consistent with Fitch criteria. As in other recent Fitch-rated SEMT transactions, SEMT 2013-10 contains binding arbitration provisions that may serve to provide timely resolution to representation and warranty disputes. In addition, all loans that become 120 days or more delinquent will be reviewed for breaches of representations and warranties.

RATING SENSITIVITIES

Fitch's analysis incorporates sensitivity analyses to demonstrate how the ratings would react to steeper market value declines (MVDs) than assumed at both the metropolitan statistical area (MSA) and national levels. The implied rating sensitivities are only an indication of some of the potential outcomes and do not consider other risk factors that the transaction may become exposed to or be considered in the surveillance of the transaction.

Fitch conducted sensitivity analysis on areas where the model projected lower home price declines than that of the overall collateral pool. The model currently projects sustainable MVDs (sMVDs) at the MSA level. For one of the top 10 regions, Fitch's sustainable home price (SHP) model does not project declines in home prices. This region is Dallas-Plano-Irving in Texas (4.3%). Fitch conducted sensitivity analysis assuming sMVDs of 10%, 15%, and 20% compared with those projected by Fitch's SHP model for this region. The sensitivity analysis indicated no impact on ratings for all bonds in each scenario.

In its analysis, Fitch considered placing a greater emphasis on recent economic performance in determining market value declines. While Fitch's current loan loss model looks to three years of historical data and one year of projections, this does not incorporate recent notable economic improvement. To reflect the more recent economic environment, a sensitivity analysis was performed using two years of historical economic data and two years of projections. The result of this sensitivity analysis was included in the consideration of the loss expectations for this transaction. This sensitivity analysis resulted in a base sMVD of 13.7%, slightly less than the 14.5% base sMVD projected in the current model.

Another sensitivity analysis was focused on determining how the ratings would react to steeper MVDs at the national level. The analysis assumes MVDs of 10%, 20%, and 30%, in addition to the model-projected 14.5% for this pool. The analysis indicates there is some potential rating migration with higher MVDs, compared with the model projection.

Additional detail on the transaction is described in the new issue report 'Sequoia Mortgage Trust 2013-10'.

Additional information is available at 'www.fitchratings.com'.

In addition to the information sources identified in Fitch's criteria listed below, Fitch's analysis incorporated data tapes, due diligence results, deal structure and legal documents from the 17g5 website available on 'www.structuredfn.com'.

Applicable Criteria and Related Research:
--'Global Structured Finance Rating Criteria', May 24, 2013;
--'Counterparty Criteria for Structured Finance and Covered Bonds', May 13, 2013;
--'U.S. RMBS Rating Criteria', July 16, 2013;
--'U.S. RMBS Loan Loss Model Criteria', Aug. 10, 2012;
--'U.S. RMBS Cash Flow Analysis Criteria', April 19, 2013;
--'U.S. RMBS Representations and Warranties Criteria', June 24, 2013;
--'U.S. RMBS Originator Review and Third-Party Due Diligence Criteria', April 26, 2013;
--'U.S. Residential and Small Balance Commercial Mortgage Servicer Rating Criteria', Jan. 31, 2011;
--'U.S. RMBS Surveillance Criteria', Oct. 11, 2012.

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Fitch Rates J.P. Morgan Mortgage Trust 2013-3

NEW YORK--(BUSINESS WIRE)--

Fitch Ratings assigns the following ratings to J.P. Morgan Mortgage Trust 2013-3 (JPMMT 2013-3):

--$289,612,000 class A-1 exchangeable certificates 'AAAsf'; Outlook Stable;

--$289,612,000 class A-2 exchangeable certificates 'AAAsf'; Outlook Stable;

--$289,612,000 class A-3 exchangeable certificates 'AAAsf'; Outlook Stable;

--$231,945,000 class A-4 certificates 'AAAsf'; Outlook Stable;

--$57,667,000 class A-5 exchangeable certificates 'AAAsf'; Outlook Stable;

--$231,945,000 class A-6 exchangeable certificates 'AAAsf'; Outlook Stable;

--$57,667,000 class A-7 exchangeable certificates 'AAAsf'; Outlook Stable;

--$28,833,500 class A-8 certificates 'AAAsf'; Outlook Stable;

--$28,833,500 class A-9 certificates 'AAAsf'; Outlook Stable;

--$20,000,000 class A-10 certificates 'AAAsf'; Outlook Stable;

--$931,000 class A-11 certificates 'AAAsf'; Outlook Stable;

--$231,945,000 class A-IO1 notional certificates 'AAAsf'; Outlook Stable;

--$57,667,000 class A-IO2 notional certificates 'AAAsf'; Outlook Stable;

--$289,612,000 class A-IO3 notional exchangeable certificates 'AAAsf'; Outlook Stable;

--$289,612,000 class A-IO4 notional certificates 'AAAsf'; Outlook Stable;

--$289,612,000 class A-IO5 notional exchangeable certificates 'AAAsf'; Outlook Stable;

--$3,451,000 class B-1 certificates 'AAsf'; Outlook Stable;

--$7,418,000 class B-2 certificates 'Asf'; Outlook Stable;

--$5,003,000 class B-3 certificates 'BBBsf'; Outlook Stable;

--$3,623,000 class B-4 certificates 'BBsf'; Outlook Stable;

The 'AAAsf' rating on the senior certificates reflects the 10.00% subordination provided by the 2.95% class A-M, 1.00% class B-1, 2.15% class B-2, 1.45% class B-3, 1.05% class B-4 and 1.40% class B-5. The $10,179,000 class A-M certificates and $4,831,665 class B-5 certificates will not be rated by Fitch.

Fitch's ratings reflect the high quality of the underlying collateral, the clear capital structure and the high percentage of loans reviewed by third party underwriters. In addition, Wells Fargo Bank, N.A. will act as the master servicer and U.S. Bank Trust N.A. will act as the trustee for the transaction. For federal income tax purposes, elections will be made to treat the trust as one or more real estate mortgage investment conduits (REMICs).

This transaction includes the use of Pentalpha Surveillance LLC (Pentalpha) as representation & warranties (R&W) breach reviewer for the benefit of the trust. The securities administrator will instruct Pentalpha to review any loan that satisfies the review trigger. Pentalpha will review the loan using the breach determination review procedures outlined in the transaction documents to identify failures with respect to one or more of the breach determination procedures. If a failure exists, Pentalpha will determine whether or not the failure is material, based on materiality conditions outlined in the transaction documents. Pentalpha will then provide the final results of its review and determination to the securities administrator.

JPMMT 2013-3 will be J.P. Morgan Mortgage Acquisition Corp.'s third transaction of prime residential mortgages in 2013. The certificates are supported by a pool of prime fixed-rate mortgage loans, 87.9% of which are fully amortizing, with the remaining 12.1% containing a 10-year interest-only period. The aggregate pool included loans originated or acquired by JPMorgan Chase Bank, National Association (JPMCB, 44.5%), First Republic Bank (FRB, 38.4%) and other various mortgage lending institutions, each of which contributed less than 10% to the transaction.

As of the cut-off date, the aggregate pool consisted of 389 loans with a total balance of $345,048,665; an average balance of $887,015; a weighted average original combined loan-to-value ratio (CLTV) of 66.3%, and a weighted average coupon (WAC) of 3.8%. Rate/Term and cash-out refinances account for 48.8% and 9.7% of the loans, respectively. The weighted average original FICO credit score of the pool is 769. Owner-occupied properties comprise 96.9% of the loans. The states that represent the largest geographic concentration are California (49.3%), New York (17.2%) and Illinois (7.5%).

KEY RATING DRIVERS

High-Quality Mortgage Pool: The collateral pool consists entirely of 30-year fixed-rate mortgages (FRMs) to borrowers with strong credit profiles and full documentation. Strong borrower quality is reflected in the 769 weighted average (WA) original FICO, 66.3% WA CLTV, $543,551 WA household income and $2.4 million WA liquid reserves. In addition, third-party due diligence was conducted on 100% of the pool and the results indicated strong underwriting controls.

Weak Representations and Warranties Framework: While the transaction benefits from JPMCB, J.P. Morgan Mortgage Acquisition Corp. (JPMMAC, rated 'A+/F1' by Fitch) and FRB (rated 'BBB+/F2') as rep providers for approximately 98.2% of the pool, Fitch believes the value of the R&W framework is diluted by the presence of qualifying and conditional language, as well as by the inclusion of sunset provisions, each of which substantially reduce lender loan-breach liability. While the agency believes that the high credit quality pool and clean diligence results mitigate the R&W risks to some degree, Fitch considered the weaker framework in its analysis.

High Geographic Concentration: The pools' primary concentration risk is California, where 49% of the properties are located. In addition, 54.6% of the properties are located in the pool's top five regions, representing metropolitan statistical areas (MSAs) in California, New York and Illinois. The pool has significant regional concentrations that resulted in an additional penalty of approximately 32% to the pool's lifetime default expectation.

RATING SENSITIVITIES

Fitch's analysis incorporates sensitivity analyses to demonstrate how the ratings would react to steeper market value declines (MVDs) than assumed at both the MSA and national levels. The implied rating sensitivities are only an indication of some of the potential outcomes and do not consider other risk factors that the transaction may become exposed to or be considered in the surveillance of the transaction.

Fitch conducted sensitivity analysis on areas where the model projected lower home price declines than that of the overall collateral pool. The model currently projects sustainable MVDs (sMVDs) at the MSA level. For one of the top 10 regions in the mortgage pool, Chicago-Joliet-Naperville, IL (6.5% of the mortgage pool), Fitch's SHP model does not project declines in home prices. Fitch conducted sensitivity analyses assuming sMVDs of 10%, 15%, and 20% for this identified metropolitan area. The sensitivity analyses indicated no impact on ratings for all bonds in each scenario.

Another sensitivity analysis was focused on determining how the ratings would react to steeper MVDs at the national level. The analysis assumes MVDs of 10%, 20%, and 30%, in addition to the model projected 15.6% for this pool. The analysis indicates there is some potential rating migration with higher MVDs, compared with the model projection.

Additional detail on the transaction is described in the new issue report 'J.P. Morgan Mortgage Trust 2013-3'.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria', May 24, 2013;

--'Counterparty Criteria for Structured Finance and Covered Bonds', May 13, 2013;

--'U.S. RMBS Rating Criteria', Jul. 16, 2013;

--'U.S. RMBS Loan Loss Model Criteria', Aug. 10, 2012;

--'U.S. RMBS Cash Flow Analysis Criteria', Apr. 19, 2013;

--'U.S. RMBS Representations and Warranties Criteria', Jun. 24, 2013;

--'U.S. RMBS Originator Review and Third-Party Due Diligence Criteria', Apr. 26, 2013;

--'U.S. Residential and Small Balance Commercial Mortgage Servicer Rating Criteria', Jan. 31, 2011;

--'U.S. RMBS Surveillance Criteria', Oct. 11, 2012.

Applicable Criteria and Related Research:

U.S. RMBS Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=713083

Counterparty Criteria for Structured Finance and Covered Bonds

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=707155

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708661

U.S. RMBS Surveillance Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=691057

U.S. Residential and Small Balance Commercial Mortgage Servicer Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=600065

U.S. RMBS Originator Review and Third-Party Due Diligence Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=707072

U.S. RMBS Representations and Warranties Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=711402

U.S. RMBS Loan Loss Model Criteria

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Residential and refinance mortgage laws in New York

Laws regarding mortgage at New York are worthy of consideration by anyone thinking of taking a plunge into the mortgage industry there. The following updated information throws light on the important aspects on this.

The mortgage lenders are required to provide a satisfaction and some mortgage related documents in accordance with Section 274 and 275 of New York State Real Property Law (RPL) and under Section 1921 of New York State Real Property Actions and Proceedings Law (RPAPL). The State of New York City's Housing and Neighborhood 2004 (Part IV) documents New York's housing and social conditions. It encompasses each of the 5 boroughs and for either the 59 community districts or the 55 sub-borough areas. One of the chapters of this fourth section (i.e. Part IV) deals with Mortgage Lending. It provides a picture of lending activity for home purchases and home refinance in the city, including measures of sub prime lending. Another chapter deals with Mortgage Foreclosures by presenting information on the filing of notices of foreclosure actions and title transfers following these filings. Since July 7, 1998 a new foreclosure remedy has become available. This is the non-judicial foreclosure by power of sale. This serves as an alternative to the judicial foreclosure in cases where it is applicable. Earlier judicial foreclosure had been the only means to foreclose a mortgage holding back real property in New York. Foreclosure of a mortgage in New York with minimum judicial involvement is facilitated by non-judicial foreclosure. Moreover, non-judicial foreclosure is accompanied by an accelerated schedule estimated to be 4-6 months which is quite contrary to the 1-2 year time schedule as required for judicial foreclosure. Action by the court is needed to obtain a receiver or deficiency judgment in case of uncontested non-judicial foreclosure. Other than this neither of the following is needed:A judgment of foreclosureComputation by refereeOther judicial action

The prior condition to be satisfied for non-judicial foreclosure is that the mortgage document has to contain a provision giving permission for the sale of the property mortgaged in case of default.

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Residential and refinance mortgage laws in New York

The prior condition to be satisfied for non-judicial foreclosure is that the mortgage document has to contain a provision giving permission for the sale of the property mortgaged in case of default.

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Residential and refinance mortgage laws in New York

The prior condition to be satisfied for non-judicial foreclosure is that the mortgage document has to contain a provision giving permission for the sale of the property mortgaged in case of default.

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Overview of recent mortgage market trend in California

Overview of recent mortgage market trend in CaliforniaCalifornia Mortgage Market - Current Trends and ForecastStrong economic growth and moderate inflation over the final quarter of 2006 contributed to a softer market pattern in 2007. The Federal Reserve has held steady with the Fed Funds rate at which banks offer overnight loans to each other. It continues to do so in order to curb inflation and foster economic growth. The Prime rate which banks charge their potential customers also remains unchanged as it is based upon the Fed Funds rate.Average mortgage rates this week15 Year FRM6.38%30 Year FRM 6.90%1 Year ARM 5.80%
*Short term rates staying low
The Fed Funds rate affects the short term mortgage rates while the Prime rate influences rates on home equity loans and lines of credit. Depending upon Fed Funds rate, initial rates on short term California mortgages (such as 1 year ARM) have gone up with respect to last year's national average rate, but currently there is a downward trend. Similarly 5 year hybrid ARMs marked an upward trend till the beginning of this year and then dropped down slightly.Search lenders in California
CityZip CodeLoan TypeAnyArmBaloonCommercialConformityFHAFixedGovtHome EquityInterest OnlyJumboNon ConformityNon OwnerPurchaseRefinanceResidentialSecondsSubprimeVA
•Long term rates are currently favorable
Considering long term California mortgage rates, 30 year FRM rates have gone up to the highest mark since the nationally recorded rate in October, 2006. 15 year fixed rate loans have been on an upward trend compared to that of a year ago when the national average rate was 5.81%. These rate hikes on the long term mortgages are primarily due to the increasing trend of interest rate on 10 year Treasury note since the final quarter of 2006. However, interest rates on both 30 year and 15 year loans have been pushed downwards.

• Housing market and popular loan options
The California housing market though declined in 2006, yet new salesrose a bit in the beginning of this year. Recent homebuyers have gonefor long term loan products in order to refinance their interest-onlyand adjustable rate mortgages. Despite the stabilization in the housingmarket, new buyers prefer to deal with alternative loan products likeinterest-only loans and option ARMs. These programs are likely toremain popular this year due to high housing costs.

However, traditional fixed rate loans and the extended fixed rate products such as 40 year and 50 year mortgages are expected to dominate the market in 2007. Besides, Prime rate ARMs (home equity lines of credit) and hybrid ARMs will also be predominant.

• Conforming loan limit remain stable
The conforming loan limit remains unchanged as in 2006. For single-family first mortgages, the maximum limit is $417000 and that for second mortgages is $208,500. However, single-family applications are likely to improve throughout the year and further into 2008. It is expected that the first 6 months of 2007 will be ideal for a home purchase as interest rates will be low during this time.

As for the whole year, interest rates on California mortgages will remain favorable. However, there is a possibility that the Fed Funds rate may go down after being stable for quite some time but then the change will not occur prior to summer. The Fed may take such a decision to curb the Fed Funds rate on account of inflation threats. But currently the economy is likely to expand slightly in 2007 rather than tip into recession. However, there are concerns over foreclosure which in California is the second highest recorded nationally.

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Residential and refinance mortgage laws in New York

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Residential and refinance mortgage laws in New York

Overview of recent mortgage market trend in California