Much like the GSEs, banks have the ability to share credit risk on a pool of assets. However, bank CRT issuance has been limited thus far as industry participants wait for an endorsement from banking regulators.

Production of non-agency MBS suffered a third-straight sharp decline in quarterly issuance. The biggest hit was in the prime RMBS sector, where jumbo securitization dropped and GSE-eligible activity nearly disappeared.

A trial that started in September after years of delays ended with a settlement. Bank of America agreed to pay $1.84 billion to settle claims tied to non-agency MBS issued by Countrywide Financial prior to the 2008 financial crisis.

Pacific Western Bank started acquiring residential mortgages in March 2021. PacWest is now done acquiring loans and looking to share credit risk on a pool with an unpaid principal balance of $2.68 billion.

In 2020, the SEC made a move to apply a disclosure rule that had been in effect for nearly 30 years to MBS and ABS. Industry participants have been able to delay enforcement of the rule while seeking changes to the disclosure requirements.

Finally, an improvement on non-QM whole-loan bids. But it’s all about the note rate if you want to earn any money on the deal.

Angel Oak Capital Advisors and a portfolio manager with the company settled with the SEC, which alleged improper reporting of delinquencies on a fix-and-flip securitization issued by Angel Oak in 2018.

There’s nowhere to hide for non-agency MBS issuers as quickly rising interest rates prompt losses. Loans the issuers are looking to sell have seen limited demand and lose value when retained even short-term.

Two prominent non-QM lenders failed in recent months amid volatility in the market. Non-agency aggregators suggest that the issues were lender-specific and the market is improving.

MBS and ABS participants gathered in Las Vegas this week, discussing volatility and weak demand from investors. The consensus? Buyers will remain cautious until getting a better handle on the Fed’s actions.