Presale reports for three deals backed by new originations were published this week. However, there’s uncertainty about how they will be received by investors due to market volatility related to the coronavirus.
The retail channel, which is the predominant source of jumbo originations, gained market share from the correspondent channel last year. (Includes data chart.)
Investors that are active in the market for non-QMs can’t seem to get enough of the loans or MBS. Meanwhile, large firms continue to avoid the sector due to concerns about liabilities and the lack of uniformity.
Despite regulatory talk about increasing efforts to help the non-agency market compete with the GSEs, the volume of noncore loans sold to Fannie and Freddie increased in 2019, led by mortgages with DTIs greater than 43%. (Includes data chart.)
If the non-agency MBS market wants to avoid harsh regulations, it should seriously consider self-governance as an option, the Structured Finance Association believes.
The SEC’s Office of Credit Ratings is exploring how it can address conflicts of interest in ratings of MBS and ABS. An increase in performance-related disclosures and boosting unsolicited ratings are being considered.