Bank of America overtook Chase and Wells Fargo as the top originator of adjustable-rate mortgages in the first quarter of 2019. The ARM share of total originations also increased slightly.
The company is set to issue the first post-crisis non-agency MBS stocked entirely with home-equity lines of credit. Fitch assigned preliminary AAA ratings to the deal.
Originations of interest-only mortgages declined in the first quarter among a group of lenders that participate in the sector. Close to 70% of the loans held by First Republic Bank, the nation's top IO lender, have IO features.
Investors in non-agency MBS face increased risks from GSE-eligible mortgages according to Moody's. The loans are allowed to have relatively high DTI ratios while still receiving QM status.
Five expanded-credit MBS deals are due at the end of the second quarter. The issuers are Ellington Financial, New Residential, Seer Capital Management and affiliates of Caliber Home and Starwood Property.
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