After playing defense in 2022, investors appear to be willing to deploy capital even as the MBS and ABS markets face numerous headwinds. Attendance at this week’s SFVegas conference hit a record level.
Prime jumbos are unlikely to account for the majority of non-agency MBS issued this year, a first for the products since the time before the financial crisis. Non-QM MBS issuance is holding up better and second-lien securitizations are building some momentum.
Two new issuers are offering expanded-credit MBS, there’s a securitization backed by newly-originated second liens and the jumbo MBS market is showing more signs of life.
The grid is used by third-party due diligence providers when assessing loans in non-agency MBS for compliance with the TILA-RESPA Integrated Disclosure rule.
The performance of expanded-credit MBS was attractive to investors until interest rates increased throughout 2022. Higher rates cut into excess interest and slowed build-up of credit enhancement levels on outstanding deals.
AB CarVal Investors and Ares Management are in the market with separate expanded-credit MBS, marking the first time either firm has offered that type of MBS.