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.

Mortgage firms continue to sell debt at a healthy clip. Is there any end in sight? Not right now. The latest participant: Sachem Capital.

The security will be backed by non-qualified mortgages originated by A&D Mortgage, an affiliated lender.

Losses on non-agency MBS, a rarity for deals issued since 2010, look likely as forbearance plans for distressed borrowers end. Investors in the senior tranches appear to be safe for now.