Wells Fargo shot to the top of the list of originators of mortgages in prime non-agency MBS in the first quarter, demonstrating the power banks have to sway the market.

First Republic Bank and Flagstar Bank posted lower originations of jumbo mortgages in the first quarter on a sequential basis. However, lower interest rates are expected to boost production in the second quarter.

Efforts by the Trump administration and the FHFA to reform the government-sponsored enterprises will likely prompt more activity in the non-agency market. However, the devil is in the details.

Issuance of expanded-credit products has grown significantly in the past year even though spreads on non-qualified MBS widened.

S&P is asking lenders and issuers to provide more details about bank statement loans as it plans to increase transparency around the product.

360 mortgage plans to originate $1 billion of mortgages that don’t require verification of a borrower’s income or assets. The pilot program is limited to non-owner-occupied investment properties, which aren’t subject to ATR requirements.

At Dec. 31, MetLife held approximately $11.74 billion in whole loans. In the past, the life insurer had focused on seasoned mortgages, but two years ago started buying newly-originated prime and near-prime mortgages.

Natural disasters are increasing in frequency, posing risks to investors in non-agency MBS, according to Moody's. Deals have some protections built-in for investors and rating services also take steps to shield investors from taking losses.

"Now having been in the mortgage industry for over 30 years, HUD’s mortgagee letter is perhaps one of the most egregious and ill-advised actions that I have seen taken by a government agency in many years," said Anne Canfield, a partner at Michael Best Strategies.