After months of sporadic issuance of MBS with newer non-QMs, five deals are in the market with fresh production. PIMCO is also selling off some older loans originated by Citadel Servicing.
Stakeholders believe an alignment will ensure the most competitive mortgage terms are accessible to the broadest segment of QM-eligible borrowers while continuing to promote safe and sound lending practices.
Two securitizations brought to the market in May were stocked with recently originated non-qualified mortgages as issuers continue to plow their way through the remainder of the pandemic.
Not since the go-go days of the mid 2000s has a national subprime REIT pulled off an IPO. If Angel Oak’s offering goes well, might the floodgates open? Wall Street can only hope.
As much as $20 billion of GSE-eligible mortgages could go into non-agency MBS annually due to new restrictions on GSE acquisitions of mortgages for investment properties and second homes.
It marks the first residential MBS rated by Kroll that aligns with a social bond framework. Fitch Ratings also rated the deal, though the firm appeared to be somewhat less impressed.
Months of improvements in the performance of non-agency MBS stalled earlier this year, though delinquencies resumed a downward trend at the end of March.
Non-agency outlets are seeing a surge in the supply of non-owner-occupied loans due to caps recently placed on GSE business. Non-agency MBS issuance is expected to increase, though pricing for jumbos is also declining.
In April, issuers offered $4.95 billion of prime non-agency MBS across nine deals. Meanwhile, only two expanded-credit MBS hit the market, totaling $735.58 million.
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