Non-Agency MBS

Browse articles from all of our Newsletters related to Non-Agency MBS.

August 10, 2018 - Inside FHA/VA Lending

MBA Urges Congress to Fix Problem of ‘Orphaned’ VA Mortgage Loans

The Mortgage Bankers Association called upon Congress to pass legislation to restore Ginnie Mae eligibility for so-called orphaned VA loans, which have caused a temporary disruption in the government-backed secondary market. In written testimony to the Senate Committee on Veterans’ Affairs last week, the MBA urged lawmakers to make technical corrections to restore the eligibility of certain Interest Rate Reduction Refinance Loans for pooling. The MBA estimated the VA orphan loan mess at roughly $500 million. Due to new loan seasoning requirements in the recently enacted Economic Growth, Regulatory Relief, and Consumer Protection Act, sime IRRRLs were rendered ineligible for Ginnie MBS pools. The loans were in transit when legislation addressing the problem of VA loan churning and serial refinancing became law in May. The new law’s seasoning provisions turned out to be ...

August 10, 2018 - Inside Nonconforming Markets

New Players Enter Non-QM Market by Aggregating Loans and Issuing MBS

More competition is coming into the nascent business of aggregating non-qualified mortgages and issuing mortgage-backed securities drawn by the market’s potential for profitable growth.

August 10, 2018 - Inside Nonconforming Markets

ARMs More Prevalent in Expanded-Credit MBS

The majority of loans in expanded-credit mortgage-backed securities are adjustable-rate mortgages, while such loans are few and far between in prime non-agency MBS, according to a new analysis by Inside Nonconforming Markets. [Includes one data chart.]

August 10, 2018 - Inside MBS & ABS

Expanded-Credit Mortgage Securitization Faltered Slightly in Second Quarter Despite Nonprime Gain

Securitization of newly-originated expanded-credit mortgages declined slightly in the second quarter despite a strong showing in the nonprime sector. [Includes one data chart.]

July 27, 2018 - Inside Nonconforming Markets

News Briefs

Moves by three issuers of prime non-agency mortgage-backed securities to allow for third-party due diligence reviews to be completed on fewer than 100 percent of the loans in an MBS could increase the risk of losses for MBS investors, according to Moody’s Investors Service. In a report released this week, Moody’s said narrower due diligence reviews increase the likelihood of defective loans appearing in non-agency MBS. The rating service added that representations ... [Includes five briefs]

July 27, 2018 - Inside Nonconforming Markets

Annaly Packs More Non-QMs into Latest MBS

Annaly Capital Management plans to include a much higher share of non-qualified mortgages in its latest non-agency mortgage-backed security than the first deal issued by the real estate investment trust this year. Non-QMs will account for 45.4 percent of the $383.5 million issuance, according to presale reports by Fitch Ratings and Kroll Bond Rating Agency. Annaly’s first MBS was largely stocked with loans that had seasoned for at least 10 years – well before the QM rule came along ...

July 27, 2018 - Inside Nonconforming Markets

Wells Set to Contribute Loans to Non-Agency MBS

In a potentially significant shift, Wells Fargo has set aside $507.0 million in mortgages for inclusion in a non-agency mortgage-backed security. Wells is the top jumbo lender and some industry analysts suggest that the jumbo MBS market won’t rebound until banks like Wells stop retaining production in portfolio. Wells said loans designated as held-for-sale for a future MBS are nonconforming mortgages that would have otherwise been stored in its portfolio. Although no other details about ...

July 27, 2018 - Inside Nonconforming Markets

Banks Among Top Sellers of Jumbo Loans in Non-Agency Securitizations

A handful of banks account for a large share of the loans in prime non-agency mortgage-backed securities issued since the start of 2017, according to a new ranking and analysis by Inside Nonconforming Markets. Banks were four of the top five originators of securitized prime mortgages between January 2017 and June 2018. More precisely, these banks ranked among the top known sources of collateral for these deals. In fact, the name of the originator was ... [Includes two data charts]

July 27, 2018 - Inside MBS & ABS

Moody’s Raises Concerns About Reduced Due Diligence in Prime MBS from Some Issuers

Three issuers of prime non-agency MBS have bucked industry standards and closed deals where some of the loans weren’t subject to pre-securitization reviews by third-party due diligence firms. The trend could cause problems for MBS investors, Moody’s Investors Service warned this week.

July 20, 2018 - Inside MBS & ABS

Non-Agency MBS Issuance Up Smartly in 2Q18 as Deals Backed by New Loans Hit Post-Crisis High

The non-agency MBS market had arguably its best quarter since the financial crisis during the April-May production cycle, generating $20.72 billion of new securities, according to a new analysis and ranking by Inside MBS & ABS. [Includes three data charts.]

July 13, 2018 - Inside Nonconforming Markets

Redwood Brings Smaller Expanded-Prime MBS

Redwood Trust is preparing to issue an expanded-prime mortgage-backed security that will be somewhat smaller than others issued by the real estate investment trust. Sequoia Mortgage Trust 2018-CH3 will be a $417.0 million issuance, according to a presale report by Kroll Bond Rating Agency. In May, Redwood issued a $520.5 million expanded-prime deal and the firm issued a $444.3 million MBS in February. Mortgages in the deals are largely similar and the pending issuance has ...

July 13, 2018 - Inside Nonconforming Markets

Verus Goes Big with Nonprime MBS

An affiliate of Verus Mortgage Capital is set to issue what will be the largest post-crisis nonprime MBS to date. The planned $489.6 million issuance will top a $426.2 million deal issued by Lone Star Funds in September. The types of mortgages in the latest Verus MBS are similar to those in a $249.0 million deal the firm issued in January, though the average loan balance in the new MBS is somewhat larger. Mortgages in the new deal have an average unpaid principal balance of ...

July 13, 2018 - Inside Nonconforming Markets

Fitch Flags R&W from Issuers It Doesn’t Rate

A handful of issuers of non-agency mortgage-backed securities not rated by Fitch Ratings were called out in a report by the rating service regarding representations and warranties. The report released at the end of June detailed how reps, warrants and enforcement provisions for various issuers compare with a “full” rep-and-warrant framework established by Fitch. The rating service includes an assessment of reps and warrants for all of the non-agency MBS the firm rates but the report also ...

July 13, 2018 - Inside Nonconforming Markets

Non-Agency MBS Issuance Backed by New Production Hits Another Quarterly Record

Issuance of non-agency mortgage-backed securities reached a third straight post-crisis quarterly record during the recently completed April-June cycle, according to a new ranking and analysis by Inside Nonconforming Markets. A total of $10.03 billion of non-agency MBS backed by new jumbo and expanded-credt originations was issued in the second quarter. The previous quarterly record was $6.28 billion in the first quarter of 2018. And in ... [Includes one data chart]

July 12, 2018 - Inside MBS & ABS

Fitch Warns of Differences in ‘Full’ Representations and Warranties from Various Issuers of Non-Agency MBS

Non-agency MBS investors might not be aware of the differences in representations and warranties provided by issuers of new non-agency MBS, according to Fitch Ratings. In a recent report, the rating service noted that issuers are diverging from standard practices in terms of “full” rep-and-warrant frameworks.

July 6, 2018 - Inside Mortgage Trends

Non-Agency Shows Promise. But How Much?

A spike in non-agency mortgage-backed security issuance has helped make 2018 the strongest year for securitizations in this niche market since the financial crisis, but the sector still has a long way to go, according to Grant Bailey, a top analyst at Fitch Ratings.


With mortgage production down noticeably this year from 2017, how many lenders might disappear via M&A or failure during the next 12 months?

10% or less. It’s not that bad out there.


11% to 25%. It’s a challenging market.


25% to 40%. It’s going to be very ugly.


No opinion.