Expanded-credit MBS issuance declined by nearly 50% in the fourth quarter compared with the previous quarter. Prime MBS issuance fared even worse, essentially freezing during the final months of the year. (Includes data chart.)

Non-agency MBS issuance perked up in early January as investor demand improved. Redwood Trust offered a jumbo MBS after a year-long lull in issuance and expanded-credit MBS issuers priced deals at tightening spreads.

The impairment rate on securitized non-QMs posted its largest one-month jump in November since the early days of the pandemic. Hurricane Ian was a factor.

The only gain was the niche market in securitized second-lien mortgages.

Prices on non-agency MBS took such a hit in 2022 that the market is now gaining popularity with investors, even with the threat of a recession. Still, new issuance in 2023 is expected to come in lower on an annual basis.

The SEC’s rulemaking agenda includes climate-related disclosures, cybersecurity disclosures and other rules aimed at the MBS and ABS markets.

Increasingly, nonbanks are using their “owned” MSRs as collateral for repo lines. And why not? Servicing values continue to be strong, and prepayments are almost non-existent.

Spreads tightened this week for a new CRT transaction from Fannie and new non-agency MBS; prepayment rates on agency MBS exceptionally low; lessons from Silvergate Bank’s crypto activity.

Loans in the new jumbo MBS have seasoned for an average of six months...

Among nonbanks, the larger shops saw their slice of the pie grow by two percentage points.