Non-Agency MBS

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

June 15, 2018 - Inside Nonconforming Markets

News Briefs

TIAA and Angel Oak Companies look likely to price separate new MBS before the end of the second quarter, according to documents filed with the Securities and Exchange Commission. JPMorgan Chase is also preparing an MBS that could differ from its typical issuance. Merrill Lynch agreed to a settlement with the Securities and Exchange Commission this week regarding non-agency mortgage-backed security trading from 2009 through 2012 ... [Includes two briefs]


June 15, 2018 - Inside Nonconforming Markets

Flagstar Makes Some Changes with Latest MBS

The latest prime non-agency mortgage-backed security from Flagstar Bank will differ somewhat from two similar deals issued by the bank this year, according to presale reports released this week. The share of mortgages subject to due diligence was adjusted and there will be a higher share of mortgages in the deal that are eligible for sale to the government-sponsored enterprises. The pending $466.93 million Flagstar Mortgage Trust 2018-4 follows deals from the bank that closed in ...


June 15, 2018 - Inside MBS & ABS

MBS Outstanding on Steady Growth Track As Mutual Funds Step Up in Early 2018

Ginnie Mae continued to lead the growth in agency single-family MBS outstanding during the first quarter of 2018, according to a new Inside MBS & ABS analysis. [Includes three data charts.]


June 1, 2018 - Inside Nonconforming Markets

News Briefs

The Structured Finance Industry Group is developing best practices for servicing fees that are passed through to non-agency mortgage-backed securities. As part of the effort, the industry group is seeking examples of servicing fees that have been disputed. The non-qualified mortgage share of originations by banks increased slightly in 2017, according to a survey by the American Bankers Association. Some 10.0 percent of bank originations in 2017 ... [Includes five briefs]


June 1, 2018 - Inside Nonconforming Markets

More Non-agency MBS Hits the Market

Issuers of non-agency mortgage-backed securities continued to bring a variety of deals in May. JPMorgan Chase and Redwood Trust are set to issue separate prime non-agency MBS and nonprime MBS is on the way from Deephaven Mortgage and Lone Star Funds. Both Chase and Redwood continue to include mortgages eligible for sale to the government-sponsored enterprises in their issuance. Such loans will account for essentially half of the $650.5 million issuance ...


June 1, 2018 - Inside Nonconforming Markets

Competition for Non-QMs Slowing Ellington’s Plans

Ellington Financial wants to speed up its issuance of non-agency mortgage-backed securities but competition for non-qualified mortgages is getting in the way. Ellington issued its first MBS backed by non-QMs in November. All of the mortgages in the $141.2 million deal were originated by LendSure. Ellington has an equity investment in the lender. Laurence Penn, president and CEO of Ellington, said the firm is preparing to issue another non-agency MBS and the nonbank would prefer to ...


May 25, 2018 - Inside MBS & ABS

Treasury Official Backs Stronger Non-Agency MBS Market but Offers Nothing on Fate of the GSEs

A key Treasury Department official said regulatory reform could help rejuvenate the non-agency MBS market but offered little guidance on the future prospects for Fannie Mae and Freddie Mac.


May 25, 2018 - Inside MBS & ABS

GSE MBS Investors Facing Adverse-Selection Risk as Pricing Improves for Non-Agency MBS

Increased demand for non-agency MBS and pricing policies set by the government-sponsored enterprises are prompting some lenders to deliver high-quality GSE-eligible mortgages into non-agency MBS pools. If the trend persists, GSE MBS investors could face risks from adverse selection, according to industry analysts.


May 25, 2018 - Inside MBS & ABS

Non-Agency MBS Making Big Strides in 2018 But Still Far From Being a Meaningful Market

2018 is shaping up to be the best year for the non-agency MBS market since the financial crisis, but it’s still just a small niche with potential.


May 18, 2018 - Inside Nonconforming Markets

Flagstar Preps Non-Agency MBS with a Twist

Flagstar Bank is set to issue a non-agency mortgage-backed security stocked solely with investment-property mortgages eligible for sale to the government-sponsored enterprises. The issuance is a first in the post-crisis era and it suggests that Flagstar expects better execution in the non-agency market than from delivering the loans to Fannie Mae or Freddie Mac. Flagstar Mortgage Trust 2018-3INV will be a $329.1 million issuance, according to presale reports published ...


May 18, 2018 - Inside Nonconforming Markets

Favorable Treatment for AIG’s Second MBS

The second prime non-agency mortgage-backed security from an affiliate of American International Group is a lot like the MBS the company issued in March, but the new deal received favorable treatment from the rating services, with lower credit enhancement on the senior tranche. PSMC 2018-2 Trust will be a $429.4 million issuance, according to presale reports published last week. The mortgages have an average credit score of 773, an average debt-to-income ratio of 33.0 percent ...


May 18, 2018 - Inside Nonconforming Markets

Redwood Flourishing with Expanded-Credit Loans

Redwood Trust boosted its net income in the first quarter of 2018 and continued to increase its originations of expanded-credit mortgages. The real estate investment trust is seeing strong demand for the loans in the secondary market and Redwood is set to issue its largest expanded-credit mortgage-backed security to date. Redwood had $46.9 million in net income in the quarter, up 51.4 percent from the fourth quarter of 2017 and up 26.7 percent from a year ago. The company sold ...


May 18, 2018 - Inside Nonconforming Markets

Mixed Trends for Non-QM MBS

Mortgage-backed security investors remain interested in non-qualified mortgages, though the hot market may be cooling off. A particularly large non-QM MBS from an affiliate of Western Asset Management Company was delayed in closing and downsized slightly as some firms suggest that returns in the market slipped in the first quarter. WAMC’s Arroyo Mortgage Trust 2018-1 was initially sized at $1.25 billion, according to presale reports published near the end of April by ...


May 18, 2018 - Inside MBS & ABS

Investment-Property Mortgages in New Non-Agency MBS Seen as More Risky than GSE-Eligible Loans

The types of investment-property mortgages being included in new non-agency MBS pose more risk to investors than similar mortgages eligible for sale to the government-sponsored enterprises, Fitch Ratings warned this week. [Includes one data chart.]


May 18, 2018 - Inside MBS & ABS

Strong Demand from Investors for Prime Non-Agency MBS Boosts Issuance Volume

The volume of prime non-agency MBS issuance is on the rise as investor demand for the product increases. Pricing in the non-agency MBS market for jumbos is rivaling execution levels for holding the loans in portfolio, and some issuers are seeing better returns by placing loans in non-agency MBS instead of delivering them to the government-sponsored enterprises.


May 11, 2018 - Inside MBS & ABS

MBS Traders Prevail in Two Cases Brought by Federal Government; RBS Settles with DOJ, GE Could be Next

Non-agency MBS traders defeated charges brought by the federal government in two separate cases late last week. In one case, a judge ruled that a lower court erred by admitting evidence against the trader; in the other, a jury determined that bluffing by a trader didn’t warrant a conviction.


May 11, 2018 - Inside MBS & ABS

Nonbanks Gearing Up to Issue Non-Agency MBS Backed by Non-QMs as Investor Demand Deepens

A handful of nonbanks are preparing to enter the non-agency MBS market as issuers of deals backed by non-qualified mortgages. Investor demand for the products remains strong, prompting interest from new entrants.


May 4, 2018 - Inside Nonconforming Markets

Redwood Buys Stake in SFR Lender

Redwood Trust entered the single-family rental market this week by purchasing a stake in 5 Arches, a lender and asset manager. The move is part of a diversification strategy for Redwood, with officials at the real estate investment trust expecting growth among renters. Redwood acquired a 20.0 percent interest in 5 Arches with a one-year option to purchase the remaining 80 percent of the company. Redwood paid $10.0 million in cash for the minority stake and can buy the rest of the ...


May 4, 2018 - Inside Nonconforming Markets

Cash-Out Refi Share of Prime MBS Increasing

The share of cash-out mortgages in prime non-agency MBS has increased in recent years, prompting concerns from Moody’s Investors Service. The rating service noted that the cash-out refi share increased from around 1.0 percent in early 2012 to around 8.0 percent in the second half of 2017. The cash-out refi share has been even higher in some recent issuance. Such loans accounted for 14.9 percent of the $736.5 million deal JPMorgan Chase issued this week ...


May 4, 2018 - Inside Nonconforming Markets

Retail, Brokers Dominate Expanded-Credit Lending

The retail channel is the main source of expanded-credit mortgages, followed by brokers, according to a new analysis by Inside Nonconforming Markets based on loans in non-agency mortgage-backed securities issued since 2016. Some 57.0 percent of loans in expanded-credit MBS issued in recent years were sourced through the retail channel. And 36.6 percent came through brokers. The shares are based on deals that disclose channel sourcing ... [Includes one data chart]


May 4, 2018 - Inside Nonconforming Markets

MBS Investors Gaining Comfort with Non-QMs

Spreads on mortgage-backed securities with non-qualified mortgages have tightened in recent years, according to S&P Global Ratings. “Since non-QM deals first appeared in 2014, their AAA spreads have tightened, suggesting that the market may be growing more comfortable with this asset class,” the rating service said. The spread measures the price of MBS tranches compared with a benchmark international swap rate. Tighter spreads indicate greater demand from investors ...


May 4, 2018 - Inside Nonconforming Markets

Chimera Packages BofA Loans into MBS

Chimera Investment issued a non-agency mortgage-backed security this week stocked with loans initially aggregated by Bank of America. The deal marked a return to the jumbo MBS market for the real estate investment trust, with officials noting strong demand from MBS investors. The $380.0 million CIM Trust 2018-J1 was largely backed by non-agency jumbo mortgages along with a 5.5 percent share of loans eligible for sale to the government-sponsored enterprises. BofA acquired ...


May 4, 2018 - Inside Nonconforming Markets

Western Asset Management Brings Non-QM MBS

An affiliate of Western Asset Management Co. is set to issue one of the largest post-crisis non-agency mortgage-backed securities. The planned $1.25 billion issuance differs in a number of ways from deals with non-qualified mortgages from other issuers. Arroyo Mortgage Trust 2018-1 will be the first non-QM MBS from WAMC. The firm has been stockpiling non-QMs and other non-agency mortgages since the end of 2014. Loans in the pending MBS have seasoned for an average of ...


May 4, 2018 - Inside MBS & ABS

Risk-Layering Stable in Prime RMBS, Despite High- CLTV Cash-Out Refis Emergence, Moody’s Reports

Collateral backing prime non-agency MBS issued after the financial crisis has performed well in part because of limited risk layering, though an increase in cash-out refinance loans is a possible source of risk, said Moody’s Investors Service.


Poll

On average, how much of a commission does your shop pay loan officers per loan they originate ?

25 to 50 basis points.

18%

51 to 100 basis points.

42%

101 to 150 basis points.

15%

North of 151 basis points. (We expect a lot.)

13%

We pay salary, not commission.

13%