After complaints from MBS investors regarding the reporting of performance of loans in non-agency deals, the Structured Finance Association released voluntary standards that could address the issue.
Issuance of non-agency MBS increased by 84% on a sequential basis in the first quarter of 2021. Chase accounted for nearly a third of all issuance. (Includes data chart.)
Two non-agency MBS issued in March included a significant number of loans that didn’t receive full appraisals due to GSE policies. Rating services penalized the collateral by increasing assessed LTV ratios.
AIG is set to issue a jumbo MBS with new production and MFA Financial has a non-QM deal with loans that have seasoned for 16 months. A surge of issuance also looks likely later this month.
A 30-day average of SOFR would make a good replacement for LIBOR when pricing new MBS and ABS, according to a recommendation from a committee of industry participants convened by the Fed.
Issuers of MBS and ABS should use a 30-day average of SOFR rather than LIBOR when setting adjustable-rate terms for new deals, according to recommendations from a group convened by the Fed.
Inside Mortgage Finance's newsletters break the mortgage market down so you get the news and data you need most, whether it's total industry coverage or just the news related to securitization, regulation, profits or other specific topics.