The proposal to end the qualified mortgage patch available to loans eligible for sale to the GSEs could boost non-agency mortgage activity, though the devil is in the details as the plan plays out leading to early 2021.
Participants in the non-agency market are looking forward to expiration of the QM patch. However, industry groups and consumer advocates want the patch to be kept intact.
Angel Oak is set to issue one of its largest expanded-credit MBS. The deal follows strong issuance in the market in July and a number of other MBS from other firms are in the works.
Redwood’s margins from non-agency mortgage activity declined in the second quarter and aren’t expected to increase much for the rest of the year, according to officials at the REIT. Redwood also has changed its MBS issuance strategy, putting seasoned mortgages into deals.
JPMorgan Chase is increasing its issuance of jumbo MBS backed by loans with relatively high LTV ratios. Meanwhile, Flagstar Bank is contributing loans to a jumbo MBS from Goldman Sachs.
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 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.
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