The SFA is working to establish a standards-setting organization that would help increase investments in non-QMs. And the association wants prime non-agency MBS to be included in any future revival of TALF.

The $500 million deal allows financing of non-QMs. Moody’s placed a preliminary A1 rating on the deal, while it typically gives a AAA rating on warehouse funding securitizations that focus on GSE-eligible loans.

MISMO and SFA are separately working to update the ASF dataset for non-agency MBS; BNY Mellon is offering new agency MBS service; a relatively rare downgrade for commercial MBS.

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.

Mortgage securitizations from Freedom Mortgage and New Residential Investment are backed by servicing fees, while Rapid Financial Services is peddling its first small-business ABS since 2018.

One of the five draft bills proposed by the House Democrats this week seeks to establish a board that would be responsible for assigning rating services to provide grades on MBS and ABS.

After focusing on securitization of residential bridge loans, Toorak Capital Partners is preparing an MBS backed by investment-property loans with 30-year terms.