Usage of VantageScore 4.0 is rising among mortgage lenders, helped by LLPAs at the GSEs and low prices for the scores. However, MBS investors have some hesitation regarding how VS4 scores compare to FICO scores.

As interest rates increase, the value of outstanding expanded-credit MBS declines. Investors are responding by demanding higher spreads for new issuance, putting pressure on issuers.

In a high-rate environment, debt service coverage ratios determine the size of an agency refinance. Those loans may not be large enough to cover the inflation-driven debt of many multifamily properties.

Interest rates on mortgages increased steadily throughout the second quarter, diminishing demand among non-agency MBS investors to some extent. (Includes data table.)

A working group at the National Association of Insurance Commissioners proposed harsh treatment of multi-collateral structured credit investments at insurance companies.

Mortgage industry analysts ponder the impact of new Fannie Mae and Freddie Mac disclosures on the MBS and credit-risk transfer markets.

SFA and other trade groups are seeking major changes to the re-proposed bank capital requirements. MBA raised concerns that non-agency MBS would receive more favorable capital treatment than GSE MBS.

Investors see expanded-credit MBS as a safer bet than consumer ABS and CLO deals.

The yield curve is helping to drive up demand for non-agency MBS. And rising delinquencies aren’t much of a concern for investors.

Investors aren’t tiering issuers/deals, fraud is a risk with cash-out DSCR mortgages, jumbos in expanded-credit MBS prepay faster than traditional expanded-credit mortgages and investors are getting aggressive with bids for GSE-eligible mortgages.