Investors in non-agency MBS face increased risks from GSE-eligible mortgages according to Moody's. The loans are allowed to have relatively high DTI ratios while still receiving QM status.
Five expanded-credit MBS deals are due at the end of the second quarter. The issuers are Ellington Financial, New Residential, Seer Capital Management and affiliates of Caliber Home and Starwood Property.
An affiliate of Angelo Gordon is set to issue its first non-QM MBS with what could be a trend-setter: many of the loans were originated by a CDFI. Such loans are exempt from the ATR and risk-retention standards.
The latest expanded-credit MBS from Angel Oak will be somewhat smaller than the first two deals the firm issued this year. The deal also includes a higher share of mortgages underwritten with 12 months of bank statements.
A number of lenders announced improvements to their investment-property mortgage programs. Verus simplified its offerings, Velocity launched a new product and Civic entered the correspondent channel.
Fix-and-flip loans are offering attractive returns to some non-agency players even as others are reducing their exposure to the market, citing concerns about slowing home-price appreciation.
Fitch has proposed adjustments to its non-agency MBS rating criteria that would levy penalties related to natural disaster risk. The impact of the proposal will largely be offset by other adjustments, according to the rating service.
Chase and Chimera are set to issue separate non-agency MBS backed by mortgages for investment properties, following similar deals from a handful of other firms.
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