A noticeable increase in warehouse credit to non-QM originators is bolstering both lending volumes and MBS creation. Another positive: better terms for nonbank borrowers.
The SEC is facing pressure to address “ratings shopping” in the MBS and ABS markets. Big rating services are not keen to switch from the issuer-pays model.
Banks will no longer have to meet extensive disclosure requirements for their MBS deals to receive investor-friendly protections. The change was met with criticism from an Obama appointee to the FDIC’s board.
As the industry moves from LIBOR to SOFR, the ARRC is seeking input on whether the spread-adjustment methodology for cash products should be consistent with what’s adopted internationally for derivatives.
Radian has pulled the plug on its experiment in the due diligence arena by selling Clayton Services. The unit’s new owner, Covius, is bullish on its prospects.
Deals backed by seasoned loans still accounted for over half of last year’s non-agency MBS issuance, but securitization of newly originated prime and expanded-credit mortgages more than doubled in 2019.
Secondary market investors, especially hedge funds and private equity firms, are bidding up the price of non-qualified mortgages. That’s good news for sellers, but can it last?
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