Issuance of prime non-agency MBS nearly ground to a halt during the fourth quarter. For the full year, activity was down almost 60%. (Includes three data charts.)

Redwood Trust scaled back its jumbo business in 2022 and doesn’t have plans for a significant expansion any time soon, even with Wells Fargo’s exit from the correspondent channel.

Most of the non-agency MBS on offer within the past two weeks was stocked with mortgages for investment properties.

First Republic Bank is working to increase its share of jumbo originations, using a combination of customer service and low interest rates.

Six expanded-credit MBS started marketing within the past two weeks and there are also offerings of prime jumbos, HELOCs and even a credit-risk transfer deal from Santander Bank.

Compared to the megabanks, it might be said that FRB’s mortgage business has held up fairly well...

Expanded-credit MBS issuance declined by nearly 50% in the fourth quarter compared with the previous quarter. Prime MBS issuance fared even worse, essentially freezing during the final months of the year. (Includes data chart.)

Wells Fargo was a major player in the jumbo correspondent channel, with a nearly 20% market share. A handful of banks have a strong presence in this category, while nonbank competitors have faced hurdles.

Non-agency MBS issuance perked up in early January as investor demand improved. Redwood Trust offered a jumbo MBS after a year-long lull in issuance and expanded-credit MBS issuers priced deals at tightening spreads.

Loans in the new jumbo MBS have seasoned for an average of six months...