Issuance of expanded-credit MBS is set for a strong start in the third quarter. Presale reports for eight deals were published in the past two weeks, including the second-largest post-crisis issuance.
The Alternative Reference Rate Committee detailed how a modified SOFR could be used in place of LIBOR for new ARM originations. It also proposed fallback language to move new ARMs away from LIBOR.
The rating service will continue to take a relatively harsh view of mortgages underwritten with alternative documentation even though they have per-formed better than expected.
Blackstone it set to issue its first non-agency MBS backed by investment-property mortgages. Most of the loans in the deal were originated by lenders affiliated with Blackstone.
Federal regulators should provide incentives for non-agency MBS issuers to standardize deal features, according to Annaly and Barclays. The firms detailed various changes that could help increase issuance.
Issuance of prime non-agency MBS declined in the second quarter on a sequential basis, led by a drop in the volume of GSE-eligible loans going into the non-agency market. Only a handful of issuers were active in the second quarter.
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