A noticeable increase in warehouse credit to non-QM originators is bolstering both lending volumes and MBS creation. Another positive: better terms for nonbank borrowers.
Banks will no longer have to meet extensive disclosure requirements for their MBS deals to receive investor-friendly protections. The change was met with criticism from an Obama appointee to the FDIC’s board.
Six non-agency MBS backed by newly-originated mortgages have been introduced since the beginning of the year. Issuance is ramping up after a slow December.
REITs with non-agency operations look attractive to stock analysts as the Trump administration works to decrease the footprint of the government-sponsored enterprises. REITs cited as “top picks” include Ellington, New Residential and Starwood.
The Structured Finance Association has launched a task force to help the industry incorporate environmental, social and corporate governance practices into the issuance of MBS and ABS.
The Structured Finance Association issued new guidelines for testing loans in non-agency MBS for compliance with TRID. Requirements were reduced, with industry participants growing more comfortable with TRID liability.
Late last month, a Manhattan district court judge denied a plaintiff investor's motion to hire experts to perform statistical sampling analysis in a case involving legacy MBS.
Provident Funding is set to issue a non-agency MBS with standard mortgages eligible for sale to the GSEs. An affiliate of Cerberus is also planning a relatively large deal backed by seasoned mortgages.
The market for MBS with non-qualified mortgages is growing by leaps and bounds. However, there is some skepticism about whether there’s enough demand to support $50 billion in annual issuance.
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