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.
The top three servicers of non-agency MBS issued during the first quarter of 2021 handled nearly 70% of the market. Shellpoint, the top-ranked firm, alone had a 41% share.
Securitization of mortgages for investment properties increased at Fannie and Freddie in the first quarter even as overall GSE business declined. Lenders appear to have rushed to deliver the loans before new restrictions took effect. (Includes data chart.)
A number of firms are working to increase originations of non-QMs and ramping up investments in the loans. It can be a highly profitable business, though investor demand is volatile.
As much as $20 billion of GSE-eligible mortgages could go into non-agency MBS annually due to new restrictions on GSE acquisitions of mortgages for investment properties and second homes.