The volume of prime non-agency MBS issuance is on the rise as investor demand for the product increases. Pricing in the non-agency MBS market for jumbos is rivaling execution levels for holding the loans in portfolio, and some issuers are seeing better returns by placing loans in non-agency MBS instead of delivering them to the government-sponsored enterprises.
The average daily trading volume in agency MBS inched up to $220.7 billion in April, a stable but weak reading compared to the earliest months of the year, according to figures compiled by the Securities Industry and Financial Markets Association.
Redwood Trust boosted its net income in the first quarter of 2018 and continued to increase its originations of expanded-credit mortgages. The real estate investment trust is seeing strong demand for the loans in the secondary market and Redwood is set to issue its largest expanded-credit mortgage-backed security to date. Redwood had $46.9 million in net income in the quarter, up 51.4 percent from the fourth quarter of 2017 and up 26.7 percent from a year ago. The company sold ...
Most real estate investment trusts that specialize in the agency MBS market allowed their portfolios to decline slightly in the first quarter of 2018, according to a new Inside MBS & ABS analysis. [Includes one data chart.]
Fannie Mae and Freddie Mac continued to whittle away at their retained mortgage portfolios during the first quarter, though the pair still had $469.3 billion of MBS and whole loans on their books at the end of March. [Includes one data chart.]
Fitch Ratings last week upgraded 18 non-agency MBS backed by seasoned loans. The deals had been issued in recent years and performed better than the rating service expected.
Ginnie Mae has reinstated one of two VA lenders it suspended last month for alleged loan churning practices that triggered rapid prepayments in the agency’s MBS.
Spreads on mortgage-backed securities with non-qualified mortgages have tightened in recent years, according to S&P Global Ratings. “Since non-QM deals first appeared in 2014, their AAA spreads have tightened, suggesting that the market may be growing more comfortable with this asset class,” the rating service said. The spread measures the price of MBS tranches compared with a benchmark international swap rate. Tighter spreads indicate greater demand from investors ...
The share of cash-out mortgages in prime non-agency MBS has increased in recent years, prompting concerns from Moody’s Investors Service. The rating service noted that the cash-out refi share increased from around 1.0 percent in early 2012 to around 8.0 percent in the second half of 2017. The cash-out refi share has been even higher in some recent issuance. Such loans accounted for 14.9 percent of the $736.5 million deal JPMorgan Chase issued this week ...
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