Issuers of expanded-credit MBS haven’t been able to stock deals with new production while one of the largest post-2010 prime non-agency MBS hit the market this week.

Issuers of prime non-agency MBS are completing deals with mortgages originated after the market volatility of March while expanded-credit MBS continue to be stocked with older loans.

There’s little uniformity in how non-agency MBS issued before 2018 will address the end of LIBOR. The majority of deals will switch to a fixed rate, while others allow for an alternative reference rate.

Demand for non-QM MBS has returned to pre-pandemic levels even though the deals include a significant amount of loans in forbearance and fewer protections for investors.

Following in the footsteps of Citi and JPMorgan Chase, Wells Fargo is preparing to issue a non-qualified mortgage MBS. The bank plans to securitize small pools of its non-agency originations on a regular basis.

The security will be backed by non-qualified mortgages originated by A&D Mortgage, an affiliated lender.

Even though a sizable portion of mortgages originated earlier in the year are in forbearance, investor demand for MBS backed by those loans is strong.

The industry wants the SEC to align disclosure norms for publicly registered non-agency MBS with those followed in private placements.

A non-QM MBS closed last week and deals from other issuers are in the works. A prime non-agency MBS with newly originated loans was also introduced.

The case is one of the rare instances in which an individual has been held accountable for actions taken during the subprime mortgage crisis.