jbancroft@imfpubs.com

The non-agency MBS market has seen dry patches before, but analysts expect this one will last throughout the remainder of 2020.

The sector was tooling along at a decent clip until the coronavirus pandemic hit U.S. markets hard in March. For the first quarter of 2020, new issuance totaled $23.16 billion, a 34.5% drop from the previous period, according to figures compiled by Inside MBS & ABS. And 85.1% of first-quarter production came in January and February.

Production plummeted 69.8% in March to just $3.51 billion, the lowest monthly volume since December 2017. There were no expanded-credit MBS issued last month, and many primary-market lenders suspended production of non-qualified mortgages.

Presale reports were released for one non-QM deal in March, a $406.9 million offering from MFA Financial, but the transaction hasn’t been issued. Several other planned deals were in the works but may never come to market. For more details and exclusive issuance tables, see the new edition of Inside MBS & ABS, now available online.