Prime jumbos are unlikely to account for the majority of non-agency MBS issued this year, a first for the products since the time before the financial crisis. Non-QM MBS issuance is holding up better and second-lien securitizations are building some momentum.
Global conflicts top of mind at SFVegas; ESG and credit risk; no housing-finance reform expected when the sun’s out; Ginnie looking to fill COO position; American Car Center’s subprime ABS under review.
Redwood Trust isn’t planning to ramp up acquisitions and sales of prime non-agency mortgages in the near term due to elevated interest rates and strong competition from banks for jumbos.
Prices on non-agency MBS took such a hit in 2022 that the market is now gaining popularity with investors, even with the threat of a recession. Still, new issuance in 2023 is expected to come in lower on an annual basis.
Declining home prices have MBS investors worried about potential losses and downgrades. Officials from rating services said their assessments include significant stresses.
A trial that started in September after years of delays ended with a settlement. Bank of America agreed to pay $1.84 billion to settle claims tied to non-agency MBS issued by Countrywide Financial prior to the 2008 financial crisis.
Initial estimates on Hurricane Ian-related losses; Biden administration limits student loan forgiveness on loans in ABS; Credit Suisse’s financial difficulties trickle down to an ABS.
Delinquencies on expanded-credit MBS are increasing but investors in the deals appear to be protected at the moment. A review of the sector by Fitch prompted many upgrades and no downgrades.
Investors that once focused on lower tranches of non-agency MBS are shifting up in credit, seeing just as strong returns from AAA-rated tranches with fewer risks. Investors in agency MBS are also changing strategies as interest rates rise.
RSS