Issuance of non-agency MBS with GSE-eligible loans is booming, largely due to restrictions on certain purchases by the GSEs.

Nine expanded-credit MBS hit the market in the past two weeks, with the deals largely backed by mortgages originated in recent months.

Trade groups representing lenders are urging regulators to maintain the link between QMs and loans exempt from mandatory risk retention.

New deals from Flagstar Bank and Redwood Trust demonstrate how quickly issuers are stocking prime non-agency MBS with new originations.

When Congress passed the Dodd-Frank Act in 2010, the SEC had nine months to issue a rule on conflicts of interest in the securitization market. The proposed rule on the issue has been pending since 2011.

After months of sporadic issuance of MBS with newer non-QMs, five deals are in the market with fresh production. PIMCO is also selling off some older loans originated by Citadel Servicing.

Stakeholders believe an alignment will ensure the most competitive mortgage terms are accessible to the broadest segment of QM-eligible borrowers while continuing to promote safe and sound lending practices.

Chase issued its fifth large prime non-agency MBS of the year, along with a number of more traditionally sized deals. United Wholesale Mortgage is also set to issue its first deal.

Nomura is set to enter the market with a deal backed by non-agency mortgages for investment properties while two other issuers also have deals with newer non-QMs. There’s also a rare non-agency MBS with jumbo reverse mortgages.

Two securitizations brought to the market in May were stocked with recently originated non-qualified mortgages as issuers continue to plow their way through the remainder of the pandemic.