A key Treasury Department official said regulatory reform could help rejuvenate the non-agency MBS market but offered little guidance on the future prospects for Fannie Mae and Freddie Mac.

Commercial banks and savings institutions held $113.75 billion of non-mortgage ABS in portfolio at the end of March, a scant 0.1 percent increase from the previous quarter, according to a new ranking and analysis by Inside MBS & ABS. [Includes two data charts.]

The Federal Housing Finance Agency went into more detail this week about the steps it is taking to make sure Fannie Mae and Freddie Mac prepayment rates are fairly congruent. And when the difference between the GSEs’ prepayment rates spreads beyond two percentage points, it must be reported to the FHFA’s Single Security Governance Committee for an explanation and remedial actions.

The Financial Industry Regulatory Authority has filed a proposed rule with the Securities and Exchange Commission to modify the definition of “agency debt security” to include credit-risk transfers for reporting and compliance purposes.

The biggest factor in the small uptick was the significant growth in the two largest ABS portfolios in the industry...

Credit characteristics continue to vary greatly between the two government-sponsored enterprises in the conventional market and Ginnie Mae. During the first quarter, the average credit score at Fannie Mae was 741.15, slightly below the average 744.73 at Freddie Mac. But the average score for Ginnie business was just 686.91. Purchase mortgages typically have higher credit scores – along with higher debt-to-income ratios – than refinance loans ... [Includes two data charts]

The FHFA said reviews have helped align GSE prepayment speeds in the past few years while helping to make sure MBS investors’ interest are considered in the equation.

Chase is the top contributor to the MBS with a 45.0 percent share, followed by United Shore Financial Services at 16.5 percent and Caliber Home Mortgage at 5.2 percent.

Non-QMs account for 81.1 percent of the dollar volume of the planned MBS while the other loans are for rental properties and exempt from ability-to-repay standards.

The non-qualified mortgage share of originations by banks increased slightly in 2017, according to a survey by the American Bankers Association. The share of banks offering non-QMs also increased.