Strong home price appreciation helped push some GSE conforming jumbos into the non-agency market. Are loans for second homes next? (Includes data chart.)
The upfront fees the GSEs charge for conforming jumbos and mortgages for second homes are set to increase. Some volume in those products will likely flow into the non-agency market.
GSE loan limits will increase by 18.1% in 2022, with a threshold of nearly $1.0 million in high-cost areas, prompting the FHFA to evaluate the relationship between home price appreciation and loan limits.
Non-agency MBS brought to the market in the past two weeks were primarily stocked with jumbo mortgages and GSE-eligible loans for investment properties. There were also a few expanded-credit deals.
UWM has its own non-agency MBS shelf, allowing the lender/servicer to directly issue deals. However, the company continues to contribute mortgages to non-agency MBS issued by others.
Nearly $4.0 billion of non-agency MBS with mortgages for investment properties was on offer in the past two weeks. Many of the deals are backed by GSE-eligible mortgages.
GSE-eligible mortgages for investment properties are reshaping the prime non-agency MBS market. The loans have somewhat looser underwriting standards than what’s typically seen on prime jumbos. (Includes three data charts.)
While caps on GSE acquisitions of loans for investment properties were suspended mid-September, non-agency issuers continue to package the loans in their MBS. Three firms entered the sector during October.
Prime jumbos and loans eligible for sale to the GSEs helped propel the non-agency MBS market to a post-2010 record in the third quarter of 2021. Issuance of expanded-credit MBS lagged. (Includes data chart.)