Much like in other parts of the MBS and ABS markets, spreads are widening on CRT issuance from the GSEs, prompting some changes in activity at Fannie Mae and Freddie Mac.

Angel Oak Director Robert McDonough noted the difficulties in pricing climate risks into securities. However, once investors can more actively analyze risks, residential MBS loan pools are likely to change, he said.

Mortgage insurers are good at analyzing credit risk, which might be why a second MI, Radian, has entered the non-agency conduit arena.

Lower origination levels continue to impact agency MBS trading volume. Meanwhile, credit quality fears are starting to gain traction in some quarters of the industry.

S&P Global said its base-case assessment places the risk of recession over the next 12 months at 40%, “with the risk greater in 2023.”

Higher cap rates and on-time rent payment rates have made LIHTC-supported housing attractive to investors in the post-pandemic economy.

Spreads on various types of residential MBS are wider than they were during the early days of the pandemic, suggesting that the assets aren’t particularly attractive to investors. However, that isn’t necessarily true.

Litigation-finance ABS, backed by advances made to injured individuals in litigation, allow plaintiffs to press for larger settlement payouts from insurance companies.

Celebrity Home Loans hired industry veteran Rudy Orman to manage correspondent non-QM loan purchases. The move comes amid turbulence in the market.

Fannie Mae and Freddie Mac plan to resume bulk acquisitions of seasoned mortgages from lenders. However, the purchases will be focused on smaller lenders.