Spreads on MBS involving non-qualified mortgages have widened due to rising interest rates and excess supply. However, demand is on the rise again as new buyers are entering the space.
Issuance of non-agency MBS with deals backed by mortgages bought out from Ginnie Mae MBS has increased in recent months. Once they’re reperforming, those loans can be re-delivered to Ginnie.
Moody’s placed AAA-rated tranches from four warehouse securitizations on review for potential downgrades following a revision to rating criteria that includes harsher treatment of deals that allow for wet loans.
Fannie removed some loans from its MBS early; Guaranteed Rate restructured a jumbo MBS before issuance; the GSEs are prepping separate risk- sharing transactions.
Non-agency MBS on offer in recent weeks include deals backed solely by mortgages originated by a Community Development Financial Institution, non-agency mortgages for investment properties and proprietary reverse mortgages.
Six issuers offered expanded-credit MBS in recent days, ending a nearly 30-day pause in issuance. Loans in the deals have seasoned for longer than the turn times seen for prime non-agency MBS.
The latest MBS from Blackstone includes non-agency mortgages for investment properties from various lenders. The firm’s pre-pandemic non-agency MBS were backed by loans from Finance of America.
UWM has its own non-agency MBS shelf, allowing the lender/servicer to directly issue deals. However, the company continues to contribute mortgages to non-agency MBS issued by others.
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