The non-agency MBS market could be headed toward its worst year ever for new issuance, and that’s saying something given its post-apocalyptic performance since 2007. New issuance of non-agency MBS totaled just $3.47 billion during the second quarter, a 31.2 percent drop from the first three months of the year, according to the Inside Mortgage Finance MBS Database. It wasn’t the slowest quarter ever, but it left the market at just $8.51 billion through the midway point in 2012, down 64.2 percent from last year’s level. Unless issuance picks up significantly in the second half of the year, 2012 will fall well short of the record low set in 2011. Although resecuritization activity picked up in the second quarter, posting a 30.7 percent gain from the first three months of the year, year-to-date issuance of these deals was down...[Includes three charts]