After reducing its non-agency investments amid volatility from the coronavirus, Annaly is ready to ramp up activity in the sector. The REIT is acquiring non-QMs and packaging them into MBS.
JPMorgan Chase is set to issue a credit-risk transfer transaction involving non-QMs and Ellington Financial is the first issuer with a non-QM MBS predominantly stocked with loans originated after March 2020.
While Fannie began accepting single-family SOFR-indexed ARMs in Au-gust, it stopped taking LIBOR-indexed mortgages at the end of September. By the end of the year, the enterprise will no longer issue LIBOR-linked MBS.
The economic effects of the pandemic have slowed refi activity for investment properties. That, in turn, has dampened prepayment speeds for 100% investment-property pools, Wells Fargo Securities said.