Performance

Non-Agency MBS Ratings Disconnected From Defaults

bivey@imfpubs.com — Thu, 10 Jul 2025 16:37:11 -0400

Researchers tracked ratings and defaults on non-agency MBS between 2013 and 2022, finding that Morningstar’s ratings were more conservative than ratings from the big three firms. However, Morningstar’s ratings produced more “false alarms” about potential defaults than the big firms.

MBS and ABS Investors Largely Positive Amid Boom

bivey@imfpubs.com — Thu, 24 Oct 2024 16:19:25 -0400

Attendance at the ABS East conference hit another record this week, with investors showing strong demand for structured finance products. Issuance is expected to remain elevated, helped by interest rate moves.

Strong Appetite for Non-QMs, Both Whole Loans and MBS

bivey@imfpubs.com — Thu, 24 Oct 2024 16:17:27 -0400

Issuance of MBS with non-qualified mortgages is growing even as insurance companies increase their purchases of non-QMs as whole loans. Investor demand for the products looks likely to remain strong.

Hurricanes Pose Hiccups for Non-Agency MBS Deals

bivey@imfpubs.com — Thu, 10 Oct 2024 16:12:00 -0400

Non-agency MBS issuers typically ensure properties in the deal are damage free. That standard can be difficult to achieve if a hurricane strikes while the deal is still in the works.

CMBS Facing Most Pressure in MBS and ABS Market

bivey@imfpubs.com — Thu, 03 Oct 2024 16:28:37 -0400

Delinquencies are projected to increase across asset classes, though some sectors will be hit harder than others.

Stable Forecast for Residential MBS; CMBS, Not So Much

dhollier@imfpubs.com — Thu, 11 Jul 2024 16:07:00 -0400

Fitch Ratings sees relatively smooth sailing for residential MBS this year while times are tough in the CMBS market, and the worst could be yet to come.

Unsuccessful GSE Loans Packaged in Non-Agency MBS

dhollier@imfpubs.com — Thu, 25 Apr 2024 16:38:28 -0400

loanDepot is preparing to issue a non-agency MBS stocked with scratch-and-dent mortgages.

First Republic’s Ties to the Non-Agency MBS Market

bivey@imfpubs.com — Thu, 04 May 2023 14:28:05 -0400

At one point, First Republic Bank was a major contributor to non-agency MBS. In recent years, the bank retained its production, though JPMorgan Chase could move to sell the loans.

Single-Family Rental Securitizations Face Challenges

bivey@imfpubs.com — Thu, 20 Apr 2023 16:41:03 -0400

The notion that the single-family rental market can flourish whether the housing market is hot or struggling is being put to the test. Kroll Bond Rating Agency cautioned that upgrades of SFR securitizations will be limited in the near term.

RMBS Outlook Dour, Performance Good Though

smanas@imfpubs.com — Wed, 23 Nov 2022 12:37:00 -0500

KBRA said that third-quarter MBS issuance volume didn’t meet its expectations and will drop rapidly in the coming year. Meanwhile, both DBRS and Moody’s noted that performance is stabilizing.

Home Price Depreciation the Top Concern for MBS Investors

bivey@imfpubs.com — Thu, 20 Oct 2022 16:09:50 -0400

Declining home prices have MBS investors worried about potential losses and downgrades. Officials from rating services said their assessments include significant stresses.

Mixed Signals in Performance of Expanded-Credit MBS

bivey@imfpubs.com — Thu, 22 Sep 2022 17:06:42 -0400

Delinquencies on expanded-credit MBS are increasing but investors in the deals appear to be protected at the moment. A review of the sector by Fitch prompted many upgrades and no downgrades.

Angel Oak Settles with SEC Over Misreporting Claim

bivey@imfpubs.com — Thu, 18 Aug 2022 17:16:53 -0400

Angel Oak Capital Advisors and a portfolio manager with the company settled with the SEC, which alleged improper reporting of delinquencies on a fix-and-flip securitization issued by Angel Oak in 2018.

Rising Interest Rates, Inflation Putting Pressure on MBS and ABS

bivey@imfpubs.com — Thu, 07 Apr 2022 16:59:57 -0400

MBS and ABS tied to floating-rate assets could see rising delinquencies as interest rates increase. Inflation also remains a concern, though Fitch and Moody’s suggest that most deals can weather the storm.

Mixed Performance from MBS with Manufactured Housing

bivey@imfpubs.com — Thu, 17 Mar 2022 17:02:13 -0400

Performance of non-agency MBS with manufactured housing loans hasn’t followed the trends seen in other sectors during the pandemic.

MBS and ABS Performance Expected to Take a Hit as Rates Rise

bivey@imfpubs.com — Thu, 10 Feb 2022 16:06:47 -0500

Borrowers with loans in various types of MBS and ABS could be stretched as interest rates increase, according to industry analysts. Prepayment rates are also likely to slow.

Grapevine: Congress Moving Toward LIBOR Fix for MBS and ABS

bivey@imfpubs.com — Thu, 04 Nov 2021 16:00:00 -0400

Congress is getting closer to passing legislation that would help legacy MBS and ABS transition away from LIBOR; there’s a securitization angle in Zillow’s move to discontinue its fix-and-flip business.

Expanded-Credit MBS Benefitting from Excess Spread

bivey@imfpubs.com — Thu, 07 Oct 2021 16:14:00 -0400

The difference between interest rates on non-QMs in MBS and the interest rate paid to investors in the securities is helping to protect investors from losses. Excess spread in the sector increased as seasoned loans were repackaged.

Underwriting Overhaul Helped Non-Agency MBS Weather COVID

bivey@imfpubs.com — Thu, 30 Sep 2021 16:07:00 -0400

Changes to underwriting standards and home price appreciation helped investors in non-agency MBS largely avoid losses during the pandemic. By comparison, cumulative losses on subprime MBS during the financial crisis of 2008 hit nearly 20%.

Non-Agency MBS Performance Back on Track After Some Hiccups

bivey@imfpubs.com — Thu, 13 May 2021 15:30:00 -0400

Months of improvements in the performance of non-agency MBS stalled earlier this year, though delinquencies resumed a downward trend at the end of March.

SFA Develops Standards for Non-Agency MBS Reporting

bivey@imfpubs.com — Thu, 22 Apr 2021 15:00:00 -0400

After complaints from MBS investors regarding the reporting of performance of loans in non-agency deals, the Structured Finance Association released voluntary standards that could address the issue.

Investor Losses in Expanded-Credit MBS Near Zero

bivey@imfpubs.com — Thu, 11 Mar 2021 14:20:00 -0500

Prepayments helped pay down senior bonds, making the remaining subordinated tranches the larger share of an expanded-credit deal’s balance. Result: A larger cushion against potential losses, DBRS said.

Delinquencies on Non-Agency MBS Still a Concern

bivey@imfpubs.com — Thu, 03 Dec 2020 14:30:00 -0500

Performance on non-agency MBS has improved after the spike in late payments seen in the spring. However, borrowers who are still delinquent could prompt losses for investors.

Outlook for RMBS Performance Tied to Coronavirus Impact

bivey@imfpubs.com — Thu, 19 Nov 2020 15:00:00 -0500

If the coronavirus continues to wreak havoc and the federal government doesn’t provide additional stimulus, the performance of residential MBS is expected to take a significant hit.

Interest Shortfalls Posing Risks for Investors in Prime Non-Agency MBS

bivey@imfpubs.com — Thu, 05 Nov 2020 16:30:00 -0500

As borrowers in prime non-agency MBS transition out of forbearance plans, investors in the deals could experience reduced cashflows due to interest shortfalls.

Sterling Bank Buying Back Non-QMs from MBS Investors

bivey@imfpubs.com — Thu, 15 Oct 2020 15:45:00 -0400

Sterling Bank has offered to buy back all non-QMs after uncovering various problems with its lending program. Between May and July, the bank repurchased loans from five MBS, taking a loss.

Non-Agency MBS Investors May See Reduced Cash Flow

bivey@imfpubs.com — Thu, 27 Aug 2020 16:00:00 -0400

Losses on non-agency MBS, a rarity for deals issued since 2010, look likely as forbearance plans for distressed borrowers end. Investors in the senior tranches appear to be safe for now.

Non-QM MBS with Pre-Crisis Loans Still Coming to Market

bivey@imfpubs.com — Thu, 06 Aug 2020 15:30:00 -0400

Even though a sizable portion of mortgages originated earlier in the year are in forbearance, investor demand for MBS backed by those loans is strong.

Outlook on MBS and ABS Upbeat Despite Pandemic

bivey@imfpubs.com — Thu, 30 Jul 2020 14:50:00 -0400

Loans backing securitized products are holding up fairly well even though the use of forbearance has increased. A combination of investor protections and changes in underwriting practices is helping.

Non-Agency MBS Investors Wary of Servicing Reporting

bivey@imfpubs.com — Thu, 16 Jul 2020 14:45:00 -0400

There’s a lack of standardization among non-agency MBS servicers regarding reporting of loans in forbearance. Investors are having difficulties understanding what exactly servicers are doing.