The rating service made a couple of issuer-friendly tweaks to its MBS loss model criteria proposed in June. The rating service, for the first time, will con-sider catastrophic risk when assessing loans.
Several real estate investment trusts, including MFA Financial and Starwood Property Trust, are expanding their portfolio of non-qualified mortgages. The loans provide attractive returns, whether retained or bundled into an MBS.
Annaly and Chimera are generating strong returns aggregating mortgages, issuing non-agency MBS and retaining subordinate tranches from the deals. Chimera plans to be a regular issuer of non-agency MBS with GSE-eligible loans.
Credit Suisse jumps into the non-QM MBS market, tapping a lender that previously contributed to MBS from Western Asset Management Company. JPMorgan Chase and PIMCO separately brought innovative deals.
Quicken increased its contributions to prime non-agency MBS this year, including $619 million of loans going into deals issued in the second quarter. Characteristics of the deals were largely unchanged.
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.
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.
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