Kroll Bond Rating Agency projects that issuance involving residential transition loans will decline by 12% on an annual basis this year, continuing the sector’s uneven yearly output.

A significant amount of wealth is expected to be transferred to younger generations in the coming years, leading to smaller mortgage amounts and a change in MBS characteristics.

The two government-sponsored enterprises reported robust earnings for the second quarter of 2026, driven by solid growth in net interest income.

Investor demand is expected to remain strong for agency MBS despite some volatility expected for the rest of the year.

Issuance of spec-pool MBS in the second quarter increased at a faster pace at Freddie than at Fannie. Pools of loans for Florida properties continued to be favored over loans from New York and Texas. (Includes data table.)

Issuers of ABS backed by data center assets need to expand their investor base as some approach concentration limits within their portfolios, according to the Kroll Bond Rating Agency.

Adoption of AI in underwriting could significantly reduce refinancing costs for small loans, eroding the prepayment protection low-loan balances have typically provided.

Fitch ratings found that early-stage delinquencies and cumulative default rates for consumer ABS deals are higher following a servicer bankruptcy or originator wind-down.

The average balance of loans in the new deal is $916,240, compared to $794,484 in Redwood’s March deal.

The Trump administration has provided little guidance on how the GSEs will achieve their goal of purchasing $200 billion of agency MBS. Still, actions by Fannie and Freddie have helped competing agency MBS investors get comfortable with activity by the mortgage giants.