An affiliate of Verus Mortgage Capital is set to issue what will be the largest post-crisis nonprime MBS to date. The planned $489.6 million issuance will top a $426.2 million deal issued by Lone Star Funds in September. The types of mortgages in the latest Verus MBS are similar to those in a $249.0 million deal the firm issued in January, though the average loan balance in the new MBS is somewhat larger. Mortgages in the new deal have an average unpaid principal balance of ...

Redwood Trust is preparing to issue an expanded-prime mortgage-backed security that will be somewhat smaller than others issued by the real estate investment trust. Sequoia Mortgage Trust 2018-CH3 will be a $417.0 million issuance, according to a presale report by Kroll Bond Rating Agency. In May, Redwood issued a $520.5 million expanded-prime deal and the firm issued a $444.3 million MBS in February. Mortgages in the deals are largely similar and the pending issuance has ...

A spike in non-agency mortgage-backed security issuance has helped make 2018 the strongest year for securitizations in this niche market since the financial crisis, but the sector still has a long way to go, according to Grant Bailey, a top analyst at Fitch Ratings.

The influx of mortgages eligible for sale to the government-sponsored enterprises being delivered to non-agency MBS is largely credit-neutral for MBS investors, according to rating services.

Credit Suisse issued a large prime non-agency mortgage-backed security this week with an unprecedented lack of disclosure: the single lender that provided loans for the deal wasn’t identified in presale reports. Fitch Ratings and Morningstar Credit Ratings placed AAA ratings on the $1.60 billion CSMC 2018-J1 Trust. It is the second largest post-crisis non-agency MBS backed by new originations. All of the loans in the deal were “acquired from a single originator in a bulk purchase ...

Several non-agency mortgage-backed securities closed before the end of the second quarter. A nonprime deal in the works from Verus Mortgage Capital could be issued early in the third quarter. JPMorgan Chase closed two non-agency MBS in June: a $938.2 million issuance backed by loans from Chase and other originators and a $490.5 million deal backed by a variety of seasoned mortgages originated by First Republic Bank. Some 59.2 percent of the mortgages in the larger Chase deal ...

Starwood Property Trust announced this week that it agreed to purchase up to $600.0 million of non-qualified mortgages originated by Impac Mortgage Holdings in the next 12 months. The real estate investment trust also revealed that it has already acquired $900.0 million of non-QMs from Impac. “We are excited to formalize our partnership with Impac, which we believe will help scale our opportunity to provide non-QM loans to high-quality borrowers while sourcing ...

A $329.1 million non-agency mortgage-backed security issued by Flagstar Bank at the end of May could be a trendsetter. The deal was backed solely by investment-property mortgages eligible for sale to the government-sponsored enterprises. Moody’s Investors Service noted that pricing policies set by Fannie Mae and Freddie Mac will likely encourage similar deals. “We expect to see more private-label securities backed by GSE-eligible investment-property loans,” the rating service said ...

Ginnie Mae continued to lead the growth in agency single-family MBS outstanding during the first quarter of 2018, according to a new Inside MBS & ABS analysis. [Includes three data charts.]

The latest prime non-agency mortgage-backed security from Flagstar Bank will differ somewhat from two similar deals issued by the bank this year, according to presale reports released this week. The share of mortgages subject to due diligence was adjusted and there will be a higher share of mortgages in the deal that are eligible for sale to the government-sponsored enterprises. The pending $466.93 million Flagstar Mortgage Trust 2018-4 follows deals from the bank that closed in ...