If the U.S. economy enters a recession, MBS and ABS are expected to perform relatively well, according to S&P. Subprime auto ABS, certain commercial MBS and CLOs are most at risk for downgrades.
Switching from LIBOR to another reference rate looks to be difficult for vintage non-agency MBS. Adopting a replacement rate will require significant communication and cooperation among investors.
Redwood has suggested a number of changes that could boost issuance of non-agency MBS. The REIT wants reforms regarding risk retention and disclosures for non-agency MBS.
New Residential Investment Corp. is pulling an about-face, of sorts. After issuing new shares of common earlier in the year, it’s now embarked on a $200 million buyback program.
Mortgage-investing REITs continue to tap the equities market. And it’s occurring at an odd time: The Dow Jones Industrial Average is gyrating like a drunken puppet.
Noting strong demand for non-agency MBS, issuers are getting creative with the types of loans they package into deals. JPMorgan, Credit Suisse, Angelo Gordon and Goldman Sachs are all entering new sectors.
The rating service’s proposal regarding the treatment of private mortgage insurance on GSE risk-sharing transactions and non-agency MBS prompted some concerns from industry participants.
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