As nonbank MBS servicers continue to gain market share, additional regulation looms large. The latest effort comes from the CSBS.

The new policy, which begins Jan. 1, will allow servicers to purchase delinquent loans out of MBS pools for up to two years.

KBRA was accused of getting sloppy on due diligence tied to CMBS and CLO deals. Without admitting wrongdoing, the rating agency agreed to pay $2 million-plus.

Recent uncertainty surrounding equities drove investors into bonds, especially agency MBS. One result: The average daily trading volume in agency product climbed to a multi-month high in August.

ABS tied to Bojangles, powersports equipment and airline mileage programs recently hit the market. Meanwhile, a whole-business ABS from Planet Fitness was downgraded.

While the delinquency rate for office property CMBS has (so far) been contained, the acceleration of the work-from-home trend may reduce demand for office space and increase cash flow volatility.

There’s little uniformity in how non-agency MBS issued before 2018 will address the end of LIBOR. The majority of deals will switch to a fixed rate, while others allow for an alternative reference rate.

Demand for non-QM MBS has returned to pre-pandemic levels even though the deals include a significant amount of loans in forbearance and fewer protections for investors.

But that’s easier said than done. The CMBS structure prohibits borrowers from taking on additional debt and includes a prepayment penalty clause, Federal Reserve Chair Jerome Powell pointed out.

Much of the criticism from the GOP concerned the re-proposed capital rule for Fannie Mae and Freddie Mac, which will reduce the capital relief the GSEs receive for credit-risk transfers.