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September 29, 2017  

EverBank Revives MBS-Issuing Discussions

EverBank is back on the list of prospective mortgage-bond issuers.

Word is circulating from bankers and rating analysts that the Jacksonville lender recently signaled plans to routinely offer bonds backed by jumbo home loans, including those that don’t meet the Consumer Financial Protection Bureau’s “qualified-mortgage” standards.

EverBank completed two mortgage-bond transactions totaling $610.7 million in 2013, but then moved to the sidelines — instead selling its accounts to operations including Redwood Trust that in some cases securitized them. Then, with interest rates rising in late 2016, word emerged that the shop was interested in resurrecting its issuance program.

But that effort stalled as EverBank moved ahead with plans to sell itself to TIAA. Now, following the June 9 completion of that takeover, the issuance push is re-gaining momentum.

The final form of EverBank’s bond program will depend largely on TIAA’s vision for the company. While industry participants say deals could start flowing in second half of 2018, they acknowledge that the timeline probably won’t become clear until the integration process is complete.

Likewise, the amount of bonds available to investors would depend on whether TIAA follows through with rumored plans to take junior positions in the deals — possibly beyond those required under the Dodd-Frank Act’s risk-retention rule. There also is talk that TIAA might buy whole loans from EverBank, thus cutting into its potential securitization volume.

EverBank’s push back into securitization results in part from an effort to cater more to first-time homebuyers and individuals with high earning potential. The bank more typically has focused on wealthy individuals.

Among its non-qualified loans, which would be subject to Dodd-Frank’s risk-retention rule if securitized, EverBank offers floating-rate and interest-only financing. All told, the bank was holding $3.2 billion of jumbo mortgages at yearend 2016.

EverBank also operates depository arm that weighed in at $19.6 billion at yearend 2016, along with an investment unit.