Since December, interest rates have increased on both non-agency jumbos and conventional-conforming mortgages. But rates have increased by a lower amount on jumbos thanks to demand for the loans at banks.
Rising interest rates had a major impact on non-agency MBS issuance in the second quarter, with volume down nearly 40% on a sequential basis. Expanded-credit MBS issuance held up better than prime volume, though the ECM sector is now in turmoil. (Includes data chart.)
No channel was immune to the downturn in jumbo originations in the first quarter of 2022, but the retail channel suffered the least. There were also wide variations at the lender level in originations trends. (Includes data chart.)
After a two-week lull in issuance of jumbo MBS, a handful of deals hit the market. MBS issuers are facing weak demand from investors, with whole-loan outlets often offering better pricing.
The decline in jumbo production in the first quarter largely tracked the overall drop in mortgage originations. Many banks kept their underwriting standards for the loans unchanged while demand decreased. (Includes data chart.)
Trends varied among the largest servicers of jumbo mortgages in the first quarter. Portfolios increased overall while the top two jumbo servicers reduced their portfolios. (Includes data chart.)
LendSure launches prime jumbo offering; online marketplace Morty offers jumbos; Point completes Series C funding round; Sachem Capital’s earnings and originations flat in first quarter.
Redwood’s profit took a hit in the first quarter, with non-agency mortgage aggregation and loan sales slowing amid a rise in interest rates. Still, officials at Redwood were happy with the REIT’s performance.