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Inside Nonconforming Markets

July 22, 2022

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Prime Non-Agency MBS Activity Shrinks in Second Quarter

Issuance of prime non-agency MBS fell sharply in the second quarter of 2022 as rising interest rates limited investor demand for the securities. Nonbanks remained the main source of prime mortgages. (Includes three data charts.) Read More

Whole-Loan Investors Out-Bidding Non-Agency MBS

Non-agency lenders looking to sell mortgages with lower interest rates only have whole-loan sales as an outlet as MBS investors wait for new originations. Read More

First Republic Boosts Jumbo Lending with Service Model, Portfolio

First Republic increased its originations for the second consecutive quarter thanks to a focus on jumbos. The bank puts an emphasis on customer service and benefits from having a portfolio to hold mortgages. Read More

Lone Star Funds Offering Non-Agency MBS with Loans from Sprout

Sprout originated about half of the loans in a new $293.5 million expanded-credit MBS from an affiliate of Lone Star Funds. Fitch Ratings assessed the deal and suggested that risks tied to Sprout were limited. Read More

Non-QMs Offer Lenders Attractive Profits, Risks

Non-QMs are a double-edged sword for lenders, offering attractive margins along with extreme volatility risk. Industry analysts suggest demand for the loans in the secondary market will recover when lenders start selling mortgages with higher interest rates. Read More

Expanded-Credit MBS Trickle into Market, Prime Issuance Frozen

Expanded-credit MBS have been few and far between in July while non-agency MBS issuers have yet to offer a prime deal during the month. Read More

Bank Demand Helping to Keep Jumbo Interest Rates Relatively Low

Since December, interest rates have increased on both non-agency jumbos and conventional-conforming mortgages. But rates have increased by a lower amount on jumbos thanks to demand for the loans at banks. Read More

News Briefs

Fitch corrects improper upgrade to non-agency credit-risk transfer transaction; RMF offers MBS with proprietary reverse mortgages; update on crypto mortgages; LoanScorecard broadens availability of bank statement analyzer. Read More

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