Prime jumbo MBS production posted the biggest increase of any sector, rising 177% from the second quarter, while ECM securitization was up 14% in the third quarter. (Includes three data charts.)
Sterling Bank has offered to buy back all non-QMs after uncovering various problems with its lending program. Between May and July, the bank repurchased loans from five MBS, taking a loss.
Issuance in the MBS and ABS markets seems to be humming along with tighter spreads. But industry participants warn investors should beware of over-optimism.
Fannie and Freddie recorded a huge increase in single-family MBS during the second quarter, capturing a huge share of the growing conventional-conforming loan market. (Includes data chart.)
There’s little uniformity in how non-agency MBS issued before 2018 will address the end of LIBOR. The majority of deals will switch to a fixed rate, while others allow for an alternative reference rate.
Demand for non-QM MBS has returned to pre-pandemic levels even though the deals include a significant amount of loans in forbearance and fewer protections for investors.
Following in the footsteps of Citi and JPMorgan Chase, Wells Fargo is preparing to issue a non-qualified mortgage MBS. The bank plans to securitize small pools of its non-agency originations on a regular basis.
Ultra-low interest rates are fueling both record originations and a stampede of debt offerings by mortgage firms far and wide. The latest participants: Rocket, NewRez and Fidelity National.
Some industry groups are concerned that the CFPB’s proposal to revise general QM standards contains unclear underwriting standards and legal uncertainties. They support the development of self-governance standards for the non-agency market.
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