Though similar in borrower base, securitized closed-end second liens perform much better than home equity lines of credit.

Many expanded-credit MBS are performing better than Fitch Ratings’ initial expectations. The rating service also completed a review of ratings on jumbo MBS, resulting in more limited upgrade activity.

Delinquencies and loan modifications on securitized non-QMs resumed increasing in May. Issuance from 2023 is performing worse than prior vintages while deals from 2024 have benefited from improved underwriting.

Impairment rate on non-QMs declines; new issuers of home equity loan securitizations; bank offers new jumbo ARMs via wholesale channel; proprietary reverse-mortgage product from Liberty Reverse Mortgage.

Looser underwriting standards for loans in expanded-credit MBS issued in 2023 are leading to higher delinquency rates.

Delinquencies on non-qualified mortgages spiked in November, adding to a “worrying” trend, according to dv01.

The performance of expanded-credit MBS was attractive to investors until interest rates increased throughout 2022. Higher rates cut into excess interest and slowed build-up of credit enhancement levels on outstanding deals.

The impairment rate on securitized non-QMs posted its largest one-month jump in November since the early days of the pandemic. Hurricane Ian was a factor.

Demand for non-QMs in the secondary market remains weak. Investors are concerned about the prepayment profile of the loans, among other issues.

Distressed borrowers with subprime mortgages in states with a judicial foreclosure process achieve non-foreclosure outcomes at a higher rate than similar borrowers in states that don’t have a such a process, according to findings from a new paper.