Banks are reducing their appetite for mortgages, providing opportunities for nonbanks to boost their investment in the mortgage market. Redwood Trust looks to be leading the way in terms of bank partnerships.
The Structured Finance Association, which is developing a compliance tool to facilitate uniformity in the non-agency MBS market on QM standards, has run into a vexing issue regarding the definition of a QM.
Regulators are pushing higher capital requirements on banks and looking favorably at credit-risk transfer transactions, helping to increase CRT issuance. Investor demand for bank CRT is also outstripping supply.
Great Ajax received a loan from Rithm Capital and moved to have Rithm serve as external manager of the REIT. Rithm plans to have Great Ajax invest in commercial mortgages.
New prohibitions against conflicts of interest in the MBS and ABS market will take effect in June 2025. But SEC officials are urging industry participants to raise compliance concerns, if any, as soon as possible.
The National Association of Insurance Commissioners is working to establish a process that would allow the regulator to alter the ratings assigned to certain MBS and ABS held by insurance companies.
Bank holding companies reported a big increase in agency MBS held in trading accounts during the third quarter. The industry also boosted its commercial MBS and ABS holdings. (Includes two data tables.)
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