The non-agency MBS market fizzled badly at the end of 2022 as new issuance declined in all the key product categories. The ECM sector held up a little better than the prime non-agency market, while NPL/RPL securitization tanked. (Includes three data charts.)
With lenders pushing mortgages that include a temporary buydown feature, MBS investors are pondering prepayment behavior for the loans. Expect loans with temporary buydowns to exhibit prepayment speeds similar to ARMs, according to an industry analyst.
The prime non-agency market took a disproportionate decline in securitization rate during the third quarter, while the government-insured sector was relatively unscathed. (Includes data chart.)
KBRA said that third-quarter MBS issuance volume didn’t meet its expectations and will drop rapidly in the coming year. Meanwhile, both DBRS and Moody’s noted that performance is stabilizing.
Now that the purchase-mortgage market is getting squishy, agency MBS issuance may sink to its lowest level in years. New pricing from the GSEs may be offset by a potential cut in FHA premiums. (Includes two data charts.)
When Ginnie released its new capital eligibility standards this past summer, nonbanks far and wide were not happy. The agency later extended the implementation deadline until late 2024, but some shops are pondering their options. Ocwen is one of them.
Agency single-family MBS production continued to erode in the third quarter despite a modest pickup in purchase loans. Meanwhile, issuance fell sharply in the commercial MBS and ABS markets. (Includes three data charts.)
The timing lag between primary market originations and MBS issuance led to a sharp increase in securitization rates in the first quarter of 2022. (Includes data chart.)
Fannie, Freddie and Ginnie securitized just $48 billion of refinance loans in May as both rate-term and cash-out activity crumpled. Purchase-mortgage business was up an anemic 0.2% from April. (Includes two data charts.)
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