Home equity investment securitization deal sizes increased with issuance in November and activity is expected to remain elevated in 2026 thanks to strong demand from investors.

Non-agency MBS issuance is up sharply this year and is expected to rise again in 2026. Delinquencies on the loans are increasing but investors are counting on cushions from home equity to help prevent losses.

SEC is looking to revise disclosure requirements to boost issuance of publicly-registered deals. Investors see some positives in private placements, which might not be easy to replicate in the public market.

Residuals from securitizations can generate close to 20% in returns though the asset class carries significant risks. Nonbanks are showing a strong appetite for the asset, but there is limited liquidity.

Revisions to disclosure requirements could prompt the issuance of publicly-registered non-agency MBS, which could eventually lead to additional demand from investors.

The structure helps issuers extend prefunding and investment periods beyond the 90-day limitation that applies to traditional real estate mortgage investment conduits.

JPMorgan Chase is marketing a prime non-agency MBS with a payment structure typically only used with expanded-credit MBS. Fitch applauded the move.

MBS exempt from Maryland licensing requirements after all; Progress Residential scraps planned single-family rental securitization; ICE offers anonymous requests-for-quote for MBS sales.

Reps. Ann Wagner, R-MO, and Brad Sherman, D-CA, raised concerns of the securitization industry with Federal Reserve Chair Jerome Powell. They aim to influence a proposal to implement changes to capital requirements for large banks.

Demand for MBS/ABS remains high, helped by interest rate trends. But President Trump is a wildcard, prompting some caution among investors.