Beginning in December, the Federal Reserve will adjust its balance sheet strategy and no longer reinvest proceeds from payoffs of agency MBS into more MBS.

Pennymac is issuing a non-agency MBS with owner-occupied loans that are eligible for sale to the government-sponsored enterprises.

Non-agency MBS issuance is up sharply this year and is expected to rise again in 2026. Delinquencies on the loans are increasing but investors are counting on cushions from home equity to help prevent losses.

SEC is looking to revise disclosure requirements to boost issuance of publicly-registered deals. Investors see some positives in private placements, which might not be easy to replicate in the public market.

Rising delinquencies on auto loans and recent bankruptcy filings by subprime auto lenders may have spooked some ABS investors.

MBS is the place to be right now with average daily trading volumes at their peaks for the year.

Feeder funds can ease the barrier of entry for investors into the residential mortgage loan market. Fitch set new rating criteria for the asset.

The sentiment among investors at the ABS East conference this week was overwhelmingly positive. Attendance at the event hit a record, and investor demand for MBS and ABS is expected to remain strong into 2026, buoyed by anticipated interest rate cuts by the Fed.

CLO reset transaction volume more than doubled from the second quarter to the third to account for 62% of total CLO issuance. New CLO issuance was running about 11% ahead of the pace set in the first nine months of 2024.

Trade groups representing smaller lenders called on the Trump administration to prompt the GSEs to increase their holdings of MBS as a way to reduce mortgage rates.