Structured finance production held at historically high levels in the third quarter, though most sectors were down. Growth pockets included non-agency MBS and ABS. (Includes four data charts.)
Attendance was down at the recent Structured Finance Association convention in Las Vegas. Discussions touched on the non-agency MBS market and the GSEs, among other issues.
The difference between interest rates on non-QMs in MBS and the interest rate paid to investors in the securities is helping to protect investors from losses. Excess spread in the sector increased as seasoned loans were repackaged.
MBS and ABS face multiple physical and transition risks from climate change over the short, medium and long term, said panelists at the annual Structured Finance Association conference.