It appears the mortgage real estate investment trust sector – a somewhat stable universe the past few years – might be ready for a major rollup, courtesy of margin compression and tighter margins.

Fitch Ratings last week upgraded 18 non-agency MBS backed by seasoned loans. The deals had been issued in recent years and performed better than the rating service expected.

The Angel Oak Companies has officially entered the small-balance commercial loan market, focusing on credits of $5 million or less for a host of properties, including multifamily, industrial, mixed-use, retail and medical.

A number of issuers are exploring bringing ABS backed by life-contingent structured settlements, according to DBRS. Interest in the sector increased following a $59.9 million deal DRB Capital issued near the end of 2017 backed by annuities and life-contingent structured settlement receivables.

Collateral backing prime non-agency MBS issued after the financial crisis has performed well in part because of limited risk layering, though an increase in cash-out refinance loans is a possible source of risk, said Moody’s Investors Service.

Ginnie Mae has reinstated one of two VA lenders it suspended last month for alleged loan churning practices that triggered rapid prepayments in the agency’s MBS.

Freddie Mac plans to issue its first credit-risk transfer deal as a trust execution this month in preparation for the new Real Estate Mortgage Investment Conduit structure, according to Michael Reynolds, vice president of credit- risk transfers.

An affiliate of Western Asset Management Co. is set to issue one of the largest post-crisis non-agency mortgage-backed securities. The planned $1.25 billion issuance differs in a number of ways from deals with non-qualified mortgages from other issuers. Arroyo Mortgage Trust 2018-1 will be the first non-QM MBS from WAMC. The firm has been stockpiling non-QMs and other non-agency mortgages since the end of 2014. Loans in the pending MBS have seasoned for an average of ...

Chimera Investment issued a non-agency mortgage-backed security this week stocked with loans initially aggregated by Bank of America. The deal marked a return to the jumbo MBS market for the real estate investment trust, with officials noting strong demand from MBS investors. The $380.0 million CIM Trust 2018-J1 was largely backed by non-agency jumbo mortgages along with a 5.5 percent share of loans eligible for sale to the government-sponsored enterprises. BofA acquired ...

Spreads on mortgage-backed securities with non-qualified mortgages have tightened in recent years, according to S&P Global Ratings. “Since non-QM deals first appeared in 2014, their AAA spreads have tightened, suggesting that the market may be growing more comfortable with this asset class,” the rating service said. The spread measures the price of MBS tranches compared with a benchmark international swap rate. Tighter spreads indicate greater demand from investors ...