Spreads on jumbo MBS widened in recent months as the supply of prime non-agency MBS surged. Redwood Trust opted for more whole-loan sales during the third quarter while JPMorgan Chase remained an active MBS issuer.

GSE-eligible mortgages for investment properties are reshaping the prime non-agency MBS market. The loans have somewhat looser underwriting standards than what’s typically seen on prime jumbos. (Includes three data charts.)

Many jumbo lenders are no longer looking to Appendix Q when originating loans. Instead, they have the option to underwrite loans using GSE automated underwriting systems and obtain QM status.

Redwood increased its locks of jumbo mortgages on a sequential basis in the third quarter while First Republic Bank’s lending declined.

Many lenders have increased their GSE loan limits nearly three months before new official limits come into play. Originating the loans, though, between now and the end of the year isn’t going to be as simple as lenders think.

Prime jumbos and loans eligible for sale to the GSEs helped propel the non-agency MBS market to a post-2010 record in the third quarter of 2021. Issuance of expanded-credit MBS lagged. (Includes data chart.)

PennyMac and United Wholesale Mortgage hiked their loan limits for GSE mortgages well before the FHFA is scheduled to announce the official limits for 2022. The move will limit some of the flow of mortgages into the non-agency jumbo market.

Amid the change in quarterly periods and SFA’s annual conference, four issuers of non-agency MBS launched deals in early October.

Among a group of jumbo lenders that report originations by channel, the broker share increased to 7.0% in the second quarter from 1.6% in the first quarter. The increase in market share was largely tied to United Wholesale Mortgage.

Rocket’s $968.4 million jumbo MBS is one of the largest from a nonbank post 2010. And after years of contributing non-QMs to MBS issued by others, AmWest is going to issue its own deal.