Production of jumbos increased by nearly 50% in 2019. The increase was proportional to broader trends in the mortgage market, but the sector didn’t keep pace in the fourth quarter. (Includes data chart.)

Issuance of non-agency MBS backed by prime mortgages offers better returns than aggregating non-QMs, according to officials at Chimera Investment.

Presale reports for 13 non-agency MBS were published in the past two weeks as issuers sought to get deals into the market ahead of the Structured Finance Association’s annual conference.

First Republic Bank enjoyed a record year for originations while jumbo production declined at Flagstar Bank and Axos Financial. The banks noted that competition suppressed originations.

Redwood is prepping a large prime non-agency MBS while Quicken issued its second deal. Seer Capital has an expanded-credit product in the works and Velocity a small-balance commercial loan deal.

Bank of America retained 94% of its mortgage originations in the fourth quarter of 2019, a much higher retention rate than other big banks. Officials at the bank said BofA’s loans offer better yields than MBS.

Presale reports for five prime non-agency MBS have been published in the past two weeks, including two deals from JPMorgan Chase. Many of the loans were funded by nonbanks and are eligible for sale to the GSEs.

Velocity completes IPO; losses on Angel Oak’s MBS temporary; Radian sells Clayton; Provident Bank acquires non-agency warehouse lender; GSF Mortgage launches jumbo product; Customers Bank takes a loss.

Issuance of prime non-agency MBS will likely increase this year, according to projections by industry analysts. The big wildcard is how FHFA’s efforts to reduce the GSEs’ footprint will impact the non-agency market.

After a lull in December, issuers are bringing non-agency MBS to the market. Redwood Trust is planning a deal with seasoned mortgages while New Residential has an expanded-credit MBS.