The federal government is marshaling all its resources to help nonbanks with MBS obligations stay liquid. For now, the effort appears to be working but new brush fires are popping up.
The secondary market for orphaned non-QM assets is thriving. This includes both whole loans and even securitizations. The biggest question for buyers: Has a floor been established yet?
Mortgage-related real estate investment trusts, including Redwood, have been hit hard by a wave of margin calls due to drastic declines in the value of their MBS. Redwood said it has met its margin calls so far.
DBRS and Fitch grew their RMBS market share in the fourth quarter as total issuance surged. S&P held on as the top ABS rating service in a slow year. (Includes two data charts.)
The Fed is taking steps to boost the market for agency MBS and certain sectors of the ABS market, while non-agency MBS isn't receiving direct relief. The Structured Finance Association called for an expansion of the new TALF.
Investor demand for non-QMs plummeted in recent weeks due to fallout from the coronavirus. Some non-QM lenders have stopped originating loans and others are repricing their products.
The creation of a U.S. sovereign wealth fund could grease the skids for an end to the conservatorships of Fannie Mae and Freddie Mac.
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