Redwood Trust has increased its partnerships with banks as it expands its jumbo mortgage acquisitions in the third quarter.

The new ABS, comprised of prime auto loans, is a portion of a security Ally privately issued in March. Ratings firms said the deal had a weaker pool composition than previous Ally securitizations.

Concord Music Group issued its second ABS last week. Concord CEO said issuing an ABS was complicated but worth the effort.

Harvest Small Business Finance is set to issue an ABS tied to the unguaranteed portion of Small Business Administration loans.

Attendance at the ABS East conference hit a record this week even as industry participants are anticipating a recession. Parts of the ABS market are offering investors better returns than corporate debt.

Nearly 90% of loan liquidations in Ginnie MBS resulted from borrower payoffs in the third quarter, with most of them linked to MBS issued in 2020 and 2021.

Bank demand for agency MBS is weak, leading to wider spreads and losses on MBS holdings for some. Banks are also reducing their lending activity, providing an opening for nonbanks.

Delinquencies are rising on commercial MBS, driven by office properties. Losses are expected to follow and it could be years before the situation improves.

Dimensional Fund researchers argue that MBS pricing is the sum of expected returns and the option-adjusted spread.

Moody’s is reviewing two note classes as part of a downgrade review of the MBS due to an accidental loan prepayment disbursement.