At the end of 2022, Redwood had more capital dedicated to its business-purpose lending efforts than to aggregation of jumbo mortgages. Officials at the REIT expect the business-purpose segment to flourish even if there’s a recession.
Rising interest rates prompted a loss of $231.6 million at MFA Financial in 2022. The losses slowed in the fourth quarter, at “only” $6.7 million, helped by business-purpose lending operations.
Two new issuers are offering expanded-credit MBS, there’s a securitization backed by newly-originated second liens and the jumbo MBS market is showing more signs of life.
The grid is used by third-party due diligence providers when assessing loans in non-agency MBS for compliance with the TILA-RESPA Integrated Disclosure rule.
The performance of expanded-credit MBS was attractive to investors until interest rates increased throughout 2022. Higher rates cut into excess interest and slowed build-up of credit enhancement levels on outstanding deals.
Freddie Mac saw a big fourth-quarter increase in Supers issuance that appeared to make up for lost ground earlier in the year. All three agencies posted declines in new REMIC production in the fourth quarter. (Includes two data charts.)
AB CarVal Investors and Ares Management are in the market with separate expanded-credit MBS, marking the first time either firm has offered that type of MBS.
The 60-day-plus delinquency rate on subprime auto ABS hit a record in December. Performance is expected to decline this year and non-investment-grade ratings could face downgrades.
January was a good month for MBS trades as transaction volume picked up substantially. Of course, there’s always been a seasonality to the early months of the year. The biggest question mark: rising rates.
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