The non-agency MBS market is starting to look more like it did before the financial collapse of 2008, although still a much slimmer version of its former self. [Includes three data charts.]

With relatively strong demand from investors for prime non-agency MBS, issuers are starting to break the mold that was established after the financial crisis. Areas of experimentation include due diligence sampling, an emphasis on loans eligible for sale to the government-sponsored enterprises and specifically tailored transactions.

Certain types of MBS and ABS appear to have some wiggle room regarding risk-retention requirements. According to industry lawyers, many single-asset/single-borrower (SASB) commercial MBS can be structured to avoid risk retention and the rules might not apply to certain esoteric ABS.

Barclays Capital and its affiliates will pay $2.0 billion to settle claims brought by the U.S. Department of Justice related to the company’s underwriting and issuance of non-agency residential MBS before the financial crisis.

Issuance of non-agency mortgage-backed securities with prime jumbo loans and expanded-credit mortgages flourished in the first quarter of 2018, according to a new ranking and analysis by Inside Nonconforming Markets. Combined, $6.28 billion of such securities was issued, more than double the activity in the first quarter of 2017 and up 24.6 percent from the fourth quarter of last year. Some $4.23 billion of prime jumbo MBS was issued during ... [Includes one data chart]

Angel Oak Capital Advisors issued a $328.76 million nonprime mortgage-backed security this week, its biggest so far. Its previous high was a $210.45 million offering in July. DBRS and Fitch Ratings assigned AAA ratings to Angel Oak Mortgage Trust I, LLC 2018-1. The deal included credit enhancement of 35.6 percent on the senior tranche, somewhat lower than previous issuance from Angel Oak. Fitch said Angel Oak has strong underwriting and risk management practices, which ...

The first jumbo mortgage-backed security from loanDepot is set to close April 6. After a span where the nonbank contributed to jumbo MBS issued by other firms, loanDepot set up its own securitization shelf. The $299.83 million Mello Mortgage Capital Acceptance 2018-MTG1 was stocked with non-agency jumbos along with conforming jumbos eligible for sale to the government-sponsored enterprises. The deal received AAA ratings from DBRS and Moody’s Investors Service with ...

JPMorgan Chase is preparing to issue a non-agency mortgage-backed security stocked entirely with loans eligible for sale to the government-sponsored enterprises. While Chase has long included GSE-eligible loans in its non-agency MBS, the deals generally also include non-agency jumbo mortgages. The mortgages in the $313.56 million deal largely look to be conforming jumbos. The loans have an average balance of $527,877. Fitch Ratings noted that the collateral attributes of the pool are ...

Fitch Ratings recently proposed changes to its loss model criteria for non-agency MBS involving servicer quality and the performance of re-performing loans.

A subsidiary of Annaly Capital Management plans to issue a non-agency mortgage-backed security with a mix of seasoned mortgages. The $327.16 million OBX 2018-1 Trust will include loans that have seasoned for an average of four years and mortgages that were called from non-agency MBS issued in 2005. The newer loans have a total unpaid principal balance of $121.86 million. Some 11.4 percent of them include interest-only features. Non-qualified mortgages account for ...