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.)

There’s plenty of non-agency MBS with GSE-eligible mortgages for investment properties, along with prime jumbo deals, expanded-credit mortgages and even some esoteric collateral.

While caps on GSE acquisitions of loans for investment properties were suspended mid-September, non-agency issuers continue to package the loans in their MBS. Three firms entered the sector during October.

The Federal Agricultural Mortgage Corp. has closed its first agricultural MBS, valued at $302.7 million.

The American Bankers Association called for a measured approach to the implementation of any capital requirements for single-family MBS issuers.

Changes implemented in response to the financial crisis of 2008 helped the MBS and ABS markets perform better than expected at the onset of the pandemic.

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.)

The supply of mortgages for non-agency MBS is expected to decline, leading to concerns that industry participants might loosen underwriting standards to prop up volumes.

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