Non-Agency MBS

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

November 8, 2018 - Inside MBS & ABS

Investors Face a Maze of Structural Issues in Assessing Value in Non-Agency MBS

Deal structure – everything from pre-issuance loan reviews to enforcement mechanisms when things go wrong – vary significantly in the non-agency MBS market, experts noted at the Structured Finance Industry Group’s recent residential mortgage conference in New York.

November 2, 2018 - Inside Nonconforming Markets

News Briefs

An affiliate of TIAA, FSB issued a $319.7 million prime non-agency mortgage-backed security this week. Most of the loans were non-agency jumbos, in addition to a 3.5 percent share of mortgages eligible for sale to the government-sponsored enterprises. Griffin Funding, a wholesale lender focused on the west coast, said it partnered with one of the largest private equity buyers of non-qualified mortgages as a fully-delegated direct seller. The private-equity firm ... [Includes three briefs]

November 2, 2018 - Inside Nonconforming Markets

Rated Jumbo Reverse Mortgage MBS Hits Market

An affiliate of Waterfall Asset Management is preparing to issue the first rated mortgage-backed security backed by non-agency reverse mortgages since 2007. Kroll Bond Rating Agency and Morningstar Credit Ratings placed preliminary AAA ratings on Cascade Funding Mortgage Trust 2018-RM2 this week. The deal is backed by 915 active jumbo reverse mortgages with a total unpaid principal balance of $571.8 million. The loans were originated between 2002 and 2008 and subsequently ...

November 2, 2018 - Inside Nonconforming Markets

Fix-and-Flip Remains a Profitable Niche

The fix-and-flip financing market saw a big upswing following the housing market collapse, when there was a bounty of properties for sale at bargain prices. Since then, the market has normalized. But experts speaking on a panel at the Residential Mortgage Finance Symposium sponsored by the Structured Finance Industry Group this week in New York say fix-and-flip financing still holds a lot of promise for lenders willing to learn its fine points. Dash Robinson, president of Redwood Trust ...

November 2, 2018 - Inside Nonconforming Markets

Verus Changes Course with Structure of MBS

An affiliate of Verus Mortgage Capital revised the structure of a planned non-agency mortgage-backed security, opting for a more traditional approach after initially planning to test a unique variation. The planned closing date for the $442.3 million issuance was also pushed back. When presale reports for Verus Securitization Trust 2018-3 were published in mid-October, the deal was structured with an initial pro rata structure that would shift to a sequential structure. The MBS ...

November 2, 2018 - Inside Nonconforming Markets

NRZ Looking for Non-QMs Beyond New Penn

New Residential plans to be a consistent issuer of mortgage-backed securities with non-qualified mortgages and the real estate investment trust is not just looking for loans from its recently acquired New Penn Financial. The first non-QM MBS from New Residential closed this week. All of the loans in the deal were originated by New Penn, an originator New Residential acquired in early July. Michael Nierenberg, chairman, president and CEO of New Residential, said the REIT is ...

November 2, 2018 - Inside Nonconforming Markets

Wells Plans to be a Regular Issuer of Jumbo MBS

A test of the jumbo mortgage-backed security market by Wells Fargo went well enough that the bank plans to regularly issue deals after avoiding the market for years. “Based on the positive response from investors to Wells Fargo’s recent private residential MBS transaction and given acceptable market conditions, we expect to do periodic offerings of private residential MBS going forward,” said Tom Goyda, a spokesman for the bank. The $441.3 million issuance from Wells that closed ...

November 2, 2018 - Inside Nonconforming Markets

Expanded-Credit MBS Underwriting Not Loosening Much; Prepayment Rates High

Trends in underwriting expanded-credit mortgages differ from what’s happening in the broader market, according to a new analysis by Inside Nonconforming Markets. Lenders have generally started to loosen standards for debt-to-income ratios and loan-to-value ratios as originations decline and the product mix shifts from refinances to purchase mortgages. However, in the expanded-credit market, credit characteristics were largely stagnant in the past year ... [Includes one data chart]

November 1, 2018 - Inside MBS & ABS

New Issuers of Non-Agency MBS See Strong Investor Demand Helping to Boost Volume

Buoyed by strong investor demand, new issues of non-agency MBS have “flourished” in recent years, according to Kroll Bond Rating Agency.

November 1, 2018 - Inside MBS & ABS

A Brighter Future for Non-Agency Lending May Translate into Better Days for Trading Desks

Companies that specialize in whole-loan trading are looking at a somewhat brighter future thanks to increasing volumes in the expanded-credit market, but it remains to be seen whether trading desks will return to the halcyon days of the pre-crisis environment.

November 1, 2018 - Inside MBS & ABS

Non-Agency MBS Market Revels in a Banner Year, But Participants Get That It’s Still Small Potatoes

Jumbo and nonprime MBS production is having its best year since the financial crisis but growing pains are clear, according to experts at the Residential Mortgage Finance Symposium sponsored by the Structured Finance Industry Group in New York this week.

October 19, 2018 - Inside Nonconforming Markets

More MBS Mix Jumbos and GSE-Eligible Loans

The latest prime non-agency mortgage-backed securities from Flagstar Bank and loanDepot include a mix of mortgages eligible for sale to the government-sponsored enterprises and non-agency jumbo mortgages. Flagstar included a further twist with its MBS, as the GSE-eligible mortgages are for investment properties. Such loans account for 77.9 percent of the planned $326.2 million Flagstar Mortgage Trust 2018-6RR. The issuance follows a $329.1 million deal that Flagstar issued in May ...

October 19, 2018 - Inside Nonconforming Markets

NRZ Brings Non-QM MBS with New Penn

New Residential Investment is set to issue its first mortgage-backed security with non-qualified mortgages. The home loans were originated by New Penn Financial, a lender that New Residential acquired in July. DBRS and Fitch Ratings assigned preliminary AAA ratings to the planned $310.7 million New Residential Mortgage Loan Trust 2018-NQM1. The deal will include credit enhancement of 32.2 percent on the senior tranche. Mortgages backing the deal have an average loan age of ...

October 19, 2018 - Inside Nonconforming Markets

Fitch Calls Out Other Ratings on Galton MBS

Top-notch ratings assigned by three firms to a non-agency mortgage-backed security from Galton Funding prompted criticism from Fitch Ratings, which didn’t rate the issuance. The planned $452.7 million Galton Funding Mortgage Trust 2018-2 diverges from traditional non-agency MBS in its treatment of unpaid interest from delinquent mortgages. Fitch suggested that the change to the deal structure was so significant that it wouldn’t rate the transaction. Fitch noted that losses from unpaid ...

October 19, 2018 - Inside Nonconforming Markets

Wells Fargo Returns to Jumbo MBS Market with its First Issuance Since Housing Crisis

Wells Fargo was set to price its first post-crisis jumbo mortgage-backed security this week, marking a significant occasion for the sector. Wells is the largest originator of jumbo mortgages and the bank has been holding production in portfolio instead of issuing non-agency MBS. Company officials note that the $441.3 million Wells Fargo Mortgage Backed Securities 2018-1 Trust is in part a test of the MBS market by the bank. The deal is scheduled to close on Oct. 25. MBS issuers generally can't ...

October 12, 2018 - Inside MBS & ABS

Wells Differs from Other Banks with Its First Post- Crisis Jumbo MBS, Prompting Low Credit Enhancement

Wells Fargo is testing the prime jumbo MBS market for the first time since the financial crisis with a transaction that has features that differ from those issued by other banks in recent years.

October 12, 2018 - Inside MBS & ABS

Non-Agency MBS Issuance Down Sharply in Third Quarter as Nonprime Sector Tops Prime

New production of non-agency MBS in the third quarter couldn’t keep pace with the record level reached in the previous period, but the market remained on track to top last year’s total issuance by the time 2018 ends. [Includes three data charts]

October 5, 2018 - Inside Nonconforming Markets

Non-Agency Reverse Mortgage MBS Expected

FHA home-equity conversion mortgages have dominated originations of reverse mortgages but tighter underwriting requirements on HECMs are expected to prompt issuance of non-agency mortgage-backed securities backed by conventional reverse mortgages, according to industry analysts. “Many originators that were solely dependent on HECM originations have begun to diversify into jumbo, uninsured, proprietary reverse mortgages, which allow higher proceeds amounts than HECMs,” ...

October 5, 2018 - Inside Nonconforming Markets

AIG Picking up Pace of Jumbo MBS Issuance

American International Group is increasing the speed of its jumbo mortgage-backed security issuance and receiving better treatment in terms of credit enhancement requirements. An affiliate of AIG is preparing to issue a $395.7 million deal, according to presale reports released this week by Fitch Ratings and Kroll Bond Rating Agency. The issuance follows deals in March, May and September. The average loan age in AIG securities is also declining. Mortgages in the pending MBS have seasoned for ...

October 5, 2018 - Inside Nonconforming Markets

Aggregator Preps New Non-Agency Products

Mortgage Venture Partners, an aggregator, is acquiring a number of new non-agency products with plans to issue mortgage-backed securities. The first deals from MVP are expected by the first quarter of 2019. Jennifer McGuinness, head of aggregation and structured finance at MVP, said that in the past two years, the firm has focused on acquiring first-lien home-equity lines of credit from banks. “It’s a first lien on assets, giving the borrower the ability to tap their equity but also use it as ...

October 5, 2018 - Inside Nonconforming Markets

Expanded-Credit MBS Issuance Up in 3Q18, Prime Non-Agency MBS Declines

Issuance trends for non-agency mortgage-backed securities stocked with newly-originated mortgages were mixed in the third quarter, according to a new ranking and analysis by Inside Nonconforming Markets. Issuance of prime non-agency MBS declined significantly on a sequential basis in the third quarter. And for the first time, expanded-credit MBS issuance volume topped prime non-agency MBS activity. Some $3.58 billion of expanded-credit MBS was ... [Includes one data chart]


With loan volumes declining, does your shop have plans to enter the non-QM lending market in 2019?

Yes, definitely. A solid move forward.
Yes, but only incrementally.
We’re pondering a move into non-QM, but haven’t made up our mind.
No, definitely not. We view it has too risky.

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