Spreads tightened this week for a new CRT transaction from Fannie and new non-agency MBS; prepayment rates on agency MBS exceptionally low; lessons from Silvergate Bank’s crypto activity.

Non-QMs account for nearly 60% of the dollar volume of Western Alliance Bank’s second credit-risk transfer transaction of the year.

Investors appear increasingly reluctant to sell their credit-risk transfer notes back to the enterprises at the prices Fannie and Freddie are offering.

Home price deceleration forced Fannie and Freddie to set aside money for potential losses on the single-family side, while high interest rates are the major risk for multifamily. (Includes data chart.)

New York-based Basis Multifamily Finance becomes the first minority/women-owned business enterprise in Fannie Mae’s Delegated Underwriter and Servicer Program.

With interest rates rising, investors want higher premiums on credit-risk transfers. And that makes the transactions less economically appealing for Fannie Mae and Freddie Mac. (Includes data chart.)

The rating service said both technicals and fundamentals in the mortgage market appear more resilient to stress than in previous crises, while highlighting some vintage differences.

Much like the GSEs, banks have the ability to share credit risk on a pool of assets. However, bank CRT issuance has been limited thus far as industry participants wait for an endorsement from banking regulators.

For the first time, Freddie Mac is attempting to buy back certain uneconomical STACRs without offering a premium.

Pacific Western Bank started acquiring residential mortgages in March 2021. PacWest is now done acquiring loans and looking to share credit risk on a pool with an unpaid principal balance of $2.68 billion.