Usage of VantageScore 4.0 is rising among mortgage lenders, helped by LLPAs at the GSEs and low prices for the scores. However, MBS investors have some hesitation regarding how VS4 scores compare to FICO scores.

Redwood Trust has been issuing non-agency MBS on its Sequoia shelf via private securitizations with minimal disclosures. The collateral in the deals is similar to typical Sequoia issuance but the securitizations receive sub-AAA ratings due to their structures.

The NAIC is expected to drill down on several preliminary proposals covering insurance company investments in securitizations following industry feedback that was critical of the potential guidelines.

As interest rates increase, the value of outstanding expanded-credit MBS declines. Investors are responding by demanding higher spreads for new issuance, putting pressure on issuers.

A strong flow of jumbo mortgages and GSE-eligible loans helped boost non-agency MBS issuance in the third quarter. (Includes three data files.)

Rising interest rates have prompted some issuers of expanded-credit MBS to use sequential structures.

Issuers expect to keep securitizing loans at a similar pace even as interest rates rise.

In a high-rate environment, debt service coverage ratios determine the size of an agency refinance. Those loans may not be large enough to cover the inflation-driven debt of many multifamily properties.

Growth was fueled by agency MBS as REITs decreased their holdings of non-agency loans in the second quarter. (Includes two data tables.)

Vandad Fartaj will lead capital market initiatives and investment strategies, with an emphasis on mortgage servicing rights.