International players and smaller insurance companies are expected to increase their investments in expanded-credit MBS.

Urban Institute researchers say the mortgage industry will experience slightly better capital treatment as a result of the changes to the Basel III Endgame, but they recommend some improvements.

The yield curve is helping to drive up demand for non-agency MBS. And rising delinquencies aren’t much of a concern for investors.

Investors aren’t tiering issuers/deals, fraud is a risk with cash-out DSCR mortgages, jumbos in expanded-credit MBS prepay faster than traditional expanded-credit mortgages and investors are getting aggressive with bids for GSE-eligible mortgages.

Sylvain Raynes, the new lead of the structured finance practice at Egan-Jones Ratings Company, warned that MBS and ABS investors are losing money if they’re relying on fairly static ratings from other firms.

The voluntary scope aims to standardize practices among due diligence reviewers and also prevent a “race to the bottom.”

The rating service last week finalized a methodology update that will allow it to rate securitizations of home equity loans.

Excluding a one-off $5.69 billion issuance from Chase, securitization of home equity loans declined during the first quarter. Activity involving closed-end second liens held up while HELOC issuance fell. (Includes three data tables.)

Fitch placed a “deteriorating” outlook on the securitized second-lien market due to rising delinquencies. However, the rating service said that the sector is still performing within its base case expectations.

The Second Circuit Court of Appeals altered some of its original findings in a lawsuit dealing with MBS liability under the Employee Retirement Income Security Act.