Prospects for non-agency MBS issuance in 2022 look mixed, with expanded-credit activity expected to increase while volume involving non-agency jumbos and GSE-eligible loans could decline.

Non-agency MBS issuers are off to a fast start this year, with four deals marketing this week. The MBS are backed by non-agency jumbos and GSE-eligible mortgages for investment properties.

The retail channel share of jumbo originations is coming back down to earth while the broker channel is receiving a boost thanks to United Wholesale Mortgage, among others. (Includes data chart.)

Issuers of prime non-agency MBS are increasingly removing loans subject to third-party due diligence reviews from the final MBS pools. Kroll Bond Rating Agency said the practice is a slippery slope.

With GSE loan limits in high-cost areas nearing $1 million in 2022, Redwood Trust called on the FHFA to use its powers to place limits on the GSEs’ acquisitions of high-balance mortgages.

GSE loan limits will increase by 18.1% in 2022, with a threshold of nearly $1.0 million in high-cost areas, prompting the FHFA to evaluate the relationship between home price appreciation and loan limits.

Non-agency MBS brought to the market in the past two weeks were primarily stocked with jumbo mortgages and GSE-eligible loans for investment properties. There were also a few expanded-credit deals.

Originations of non-agency jumbo mortgages increased by 6.3% from the second to the third quarter. Wells Fargo remained the top jumbo lender, while three firms in the top 10 posted declines. (Includes data chart.)

Servicing of jumbo mortgages increased at most of the 30 top firms in the sector during the third quarter. However, top-ranked Wells Fargo bucked the trend. (Includes data chart.)

The largest non-agency MBS on offer in the past two weeks was a $762 million deal from United Wholesale Mortgage. Barclays Capital is also set to issue an expanded-credit MBS.