MBS creation took off like a rocket in the second quarter and the way lenders are feeling today the good times should last for a few more months at least. But there is a downside: prepayment speeds.

Bullish signs abound for non-QM securitizations. Top-ranked lenders Angel and Citadel Servicing Corp. are coming off record originations for 2Q19. Angel Oak believes the market is underestimated.

With increased competition in financing channels, commercial MBS is losing its popularity to fund commercial real estate loans when a previous CMBS loan reaches maturity, according to a Trepp report.

The Wall Street trade group cautioned that releasing the GSEs from conservatorship without an explicit government guarantee will scare investors and reduce the liquidity in the TBA market.

The Federal Deposit Insurance Corp. plans to ease disclosure requirements for privately placed residential MBS under a rule guaranteeing the agency won’t reclaim securitization assets upon a bank’s failure.

With interest rates falling, refis have spiked, creating a wave of principal pre-payments that the Fed has used to cut its MBS holdings.

In a bid to boost liquidity for issuers, especially nonbank players, Ginnie Mae by yearend will allow financing of servicing advances.

Issuance of whole-business ABS is on track to break a record this year, with $4.6 billion in volume at halfway mark. Issuers include fast food companies, aftermarket car services and spa services.

Declining interest rates helped fuel a securitization boom at Fannie and Freddie in the second quarter. However, falling rates will force writedowns tied to derivatives.

A new private activity bond will fund construction of tolled express lanes near Washington, DC. Toll revenues on similar bonds have been strong and rating services affirmed BBB ratings on outstanding issuance.