Non-agency MBS with mortgages originated by CDFIs faces scrutiny from rating services; The Change Company pushes back; MBS and ABS investor preferences on credit scoring models.

Issuance of expanded-credit MBS flowed in the first half of the year even as lenders grappled with higher interest rates. Issuance is expected to slow as lenders work to establish a new supply of loans with higher interest rates.

The Structured Finance Association had asked the Securities and Exchange Commission to hold off on new environmental, social and governance naming and disclosure requirements for asset-backed securities while SFA works on its ESG best practices.

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.

Issuing a non-agency MBS isn’t cheap; trade groups push for data, timeline if GSEs change credit scoring models; Ginnie reiterates its buyout policy.

Ginnie Mae MBS issuance in April remained flat month-over-month even as refinance activity declined dramatically. (Includes two data charts.)

A handful of real estate investment trusts acquired non-QMs at a discount as interest rates increased during the first quarter. Lenders selling the loans took some losses but appear to have weathered the storm.

MFA Financial took a large loss in the first quarter as rising interest rates reduced the value of non-QMs on the REIT’s balance sheet. Lima One, a business-purpose lender now owned by MFA, was a bright spot.

Barclays sourced many of the mortgages in the MBS from Invigorate Finance, an aggregator founded in March 2021.

Originations at Velocity Financial increased in the first quarter despite an increase in interest rates. The lender’s income declined, though much of the drift was tied to a refi of corporate debt that could be beneficial in the long term.