Although the non-QM portion of the non-agency market accounted for less than $10 billion in 2018, it could absorb more than $50 billion in former patch loans if it continues its current annual growth rate.
Both GSEs posted their highest monthly volume of single-family MBS issuance since January 2017. Purchase-mortgage and refinance business rose significantly.
“Patch” loans, cash-out refinances, investment loans and second family homes constitute more than 50% of the dollar volume of Fannie and Freddie MBS issuance.
There are some worrying trends buried in the tables of Freddie Mac’s quarterly refinance statistics for 2018. This, of course, is just a small slice of the economic pie, but the data have all the hallmarks of another housing bubble.
Fannie Mae and Freddie Mac issued a combined total of just $51.86 billion of single-family mortgage-backed securities in January, their lowest monthly production since February 2016. [Includes two data charts.]
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