Santander Bank is issuing a securitization of closed-end second liens sourced from Pennymac. Also, an affiliate of PIMCO is offering a securitization of seasoned HELOCs.
The structure helps issuers extend prefunding and investment periods beyond the 90-day limitation that applies to traditional real estate mortgage investment conduits.
PennyMac Mortgage Investment Trust has been issuing about one prime non-agency MBS per month, stocking the deals with GSE-eligible mortgages for investment properties and second homes. Now the REIT is set to issue jumbo MBS.
Non-agency securitization of home equity loans resumed its rising trajectory after slumping in the fourth quarter of 2024. Rocket was the top issuer in the first quarter, focusing on closed-end second liens. (Includes two data tables.)
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.
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.
The MBS is stocked with investment-property mortgages eligible for sale to the GSEs. Bayview Asset Management last issued a non-agency MBS on its Oceanview shelf in October 2022.
Growth in securitizations of home equity loans slowed in the third quarter from an exponential pace earlier in the year. Still, issuance was up, with Rocket leading the way. (Includes two data tables.)
Issuance of MBS with non-qualified mortgages is growing even as insurance companies increase their purchases of non-QMs as whole loans. Investor demand for the products looks likely to remain strong.
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