MBS backed by home equity loans originated by nonbanks was the fastest-growing sector of the non-agency market in the first quarter. Both prime and ECM issuance continue to grow as well. (Includes three data tables.)
Few issuers tried to price non-agency MBS in the days following President Trump’s tariff announcement last week. An expanded-credit MBS from Annaly priced at the widest spreads seen in more than a year.
Reps. Ann Wagner, R-MO, and Brad Sherman, D-CA, raised concerns of the securitization industry with Federal Reserve Chair Jerome Powell. They aim to influence a proposal to implement changes to capital requirements for large banks.
An affiliate of Balbec Capital brought three deals in March alone with another set to begin marketing shortly. Goldman Sachs and Citi also issued non-agency MBS with reperforming loans.
The securitization rate for non-agency jumbo mortgages more than doubled on an annual basis in 2024. And the non-agency MBS share of originations of expanded-credit mortgages increased. (Includes data table.)
Moody’s proposed using two home-price forecasts when assessing loans in residential MBS. Currently, the rating service uses one fairly conservative forecast for home prices.
On some recently issued expanded-credit MBS, servicing fees have been as low as 5 basis points. S&P and some other rating services review deals applying assumptions for higher servicing fees.
U.S. depository institutions remained key players supporting the MBS market, but their combined holdings declined in the fourth quarter. Mutual funds and life insurers picked up the slack. (Includes three data tables.)
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