On some recently issued expanded-credit MBS, servicing fees have been as low as 5 basis points. S&P and some other rating services review deals applying assumptions for higher servicing fees.

Rising mortgage delinquencies increase spreads on residential MBS, as expected, along with spreads on credit card, student loan and auto loan ABS.

S&P remained the top provider of ABS ratings at the nine-month mark despite a 24% drop in the third quarter, while Fitch held its lead rating residential MBS. (Includes two data tables.)

Hodgepodge of non-agency MBS; new commercial MBS tied to Rockefeller Center; limit-order option for lenders looking to sell into TBA MBS; Moody’s downgrades MBS issued by IndyMac in 1997.

Issuance of non-agency MBS backed by scratch-and-dent mortgages to date this year has surpassed issuance through all of 2023.

Deals rated by Moody’s successfully navigated the end of LIBOR reporting; vintage MBS wrapped by MBIA downgraded; GSEs, Ginnie increase MBS disclosures; ICE offers emissions estimates for MBS; new TBA trading app from South Street Securities.

Delinquencies are projected to increase across asset classes, though some sectors will be hit harder than others.

A task force at the National Association of Insurance Commissioners recommended adoption of a proposal to alter credit ratings on investments at insurance companies. However, NAIC didn’t move forward with the proposal at a meeting last week.

Fitch generally views the deals as “credit neutral” for bank ratings, though there are some instances where CRT usage could put a bank’s ratings at risk for downgrade.

Fitch Ratings sees relatively smooth sailing for residential MBS this year while times are tough in the CMBS market, and the worst could be yet to come.