In the past two weeks, $2.74 billion of non-agency MBS were gobbled up by investors. GSE-eligible mortgages for non-owner-occupied properties accounted for half of the dollar volume in the deals.

Thanks to restrictions implemented earlier this year, GSE MBS issuance involving mortgages for investment properties dropped in the second quarter. Conforming jumbo business also declined. (Includes data chart.)

The three servicers added significant volume to their portfolios thanks to the surge in non-agency MBS issuance during the second quarter of 2021. The performance of securitized loans also continues to improve. (Includes data chart.)

The offerings in the non-agency MBS market range from deals backed by prime jumbo mortgages to investment-property loans that were eligible for sale to the GSEs to non-QMs.

The real estate investment trust’s income from the aggregation of jumbo mortgages dropped while its business-purpose lending segment flourished. Margins on jumbos took a hit due to competition in the sector.

Chase was the most active player in the non-agency MBS market in late July, with deals involving jumbos, investment-property mortgages and a risk-sharing transaction.

Issuance of prime jumbo MBS increased by 54% on a sequential basis in the second quarter. Refis accounted for much of jump, including a large amount of loans with a cash-out component. (Includes two data charts.)

Mortgage production increased by 26% in the second quarter on a sequential basis at the jumbo-focused First Republic Bank. And lock volume declined by 15% at Redwood.

Toorak Capital Partners expanded its securitization activities into 30-year mortgages for investment properties. Bayview Asset Management and Goldman Sachs have jumbo MBS in the market, and a number of other issuers are planning deals.

As interest rates declined in 2020, the ARM share of jumbo originations plummeted. Lenders also got more lenient with DTI ratios, while average credit scores and LTV ratios tightened somewhat.