Changes to underwriting standards and home price appreciation helped investors in non-agency MBS largely avoid losses during the pandemic. By comparison, cumulative losses on subprime MBS during the financial crisis of 2008 hit nearly 20%.

Issuers are still stocking non-agency MBS with GSE-eligible mortgages for investment properties. Lenders and issuers are considering their options following a suspension of limitations placed on the GSEs.

The definitions used by non-agency MBS lenders and issuers aren’t consistent and many terms haven’t been updated since 2009. The MISMO and the SFA are separately working on setting new standards.

Wells Fargo stocked its latest prime non-agency MBS with conforming jumbo mortgages and Redwood Trust is using blockchain technology in its new deal.

President Biden plans to nominate Alanna McCargo to be the next president of Ginnie Mae; Credit Suisse’s warehouse lending securitization involving non-QMs upsized.

Thanks to restrictions placed on the GSEs, investment-property mortgages are flowing into non-agency MBS. Some lenders are issuing deals on their own while others are turning to aggregators like Credit Suisse.

The recently public real estate investment trust focuses nearly all of its investments on non-QMs originated by affiliated lenders.

The company’s $450 million issuance has a 30-month term and is backed by houses purchased directly from homeowners.

With new restrictions on GSE sales, lenders are increasingly turning to the non-agency MBS market to sell mortgages for investment properties. Issuers include new and established participants.

Big increases in large-loan CMBS and single-asset/single-borrower transactions helped pump non-agency volume to $37 billion in the second quarter, the highest since the end of 2019. (Includes two data charts.)