bivey@imfpubs.com

Issuance of expanded-credit mortgage-backed securities increased on a sequential basis in the first quarter while prime non-agency MBS activity tumbled, according to a new ranking and analysis by Inside Nonconforming Markets.

Some $34.97 billion of non-agency MBS backed by newly originated mortgages was issued during 1Q22, essentially flat compared to 4Q21.

Expanded-credit MBS issuance increased 38.6% to $14.10 billion in the January-to-March period. The collateral: non-qualified mortgages and other non-jumbo, non-agency products.

While expanded-credit MBS issuers faced lower profitability amid rising interest rates and reduced demand from investors, they piled into the market. In some cases, investors changed deal terms to their advantage with originators having little in the way of bargaining power.

For more details and exclusive tables, see the new edition of Inside Nonconforming Markets, now available online.