After a brief rebound in the first quarter, issuance of non-agency MBS declined in the most recent three-month period despite a tiny increase in prime deals.
At one point, First Republic Bank was a major contributor to non-agency MBS. In recent years, the bank retained its production, though JPMorgan Chase could move to sell the loans.
Issuance of all the major RMBS products rose significantly in the first quarter of 2023, although average seasoning in the deals was higher. Subordination levels in ECM deals rose as investor demand weakened and collateral trended riskier. (Includes three data charts.)
Prime jumbos are unlikely to account for the majority of non-agency MBS issued this year, a first for the products since the time before the financial crisis. Non-QM MBS issuance is holding up better and second-lien securitizations are building some momentum.
AB CarVal Investors and Ares Management are in the market with separate expanded-credit MBS, marking the first time either firm has offered that type of MBS.