Investor demand for non-agency mortgage-backed securities with non-qualified mortgages appears to have been boosted by the performance of such deals issued in recent years. There have been some delinquencies – owing to somewhat loose underwriting standards – but investors have largely been protected from losses. DBRS recently analyzed 18 non-QM MBS issued since 2015 and found that only three deals had experienced losses as of September. A $150.4 million deal from ...

Issuance of single-family rental securities started in 2013 and hit $7.17 billion in 2015, according to Inside MBS & ABS. Industry analysts suggest that the relative boom in issuance is over due to a number of factors, including activity by the government-sponsored enterprises.

The dollar volume of non-agency MBS backed by non-qualified mortgages could double or even triple next year, according to industry analysts. The increased issuance is expected to come from nonprime and prime borrowers who don’t qualify for conforming mortgages.

The nonprime mortgage-backed security closed by Angel Oak Capital Advisors at the end of November was oversubscribed, according to Lauren Hedvat, director of capital markets at the firm. The $210.2 million AOMT 2017-3 was backed by mortgages originated by Angel Oak Mortgage Solutions, Angel Oak Home Loans and Angel Oak Prime Bridge. Non-qualified mortgages accounted for 83.9 percent of the dollar volume in the MBS. Angel Oak said it’s ... [Includes two briefs]

Starwood Property Trust plans to issue a non-agency mortgage-backed security with non-qualified mortgages in the first quarter of 2018, according to officials at the real estate investment trust. Starwood only recently started acquiring non-QMs, with help from Federal Home Loan Bank advances. Officials said the company acquired $128.0 million of non-agency mortgages in the third quarter, bringing the REIT’s portfolio of such loans to $419.0 million. Jeffrey DiModica, Starwood’s ...

A new, somewhat atypical, non-agency mortgage-backed security from JPMorgan Chase includes a large share of non-qualified mortgages and no fixed-rate mortgages. JPMorgan Mortgage Trust 2017-5 is a $671.7 million deal that received preliminary AAA ratings last week from Fitch Ratings, Kroll Bond Rating Agency and Moody’s Investors Service. The first four deals from Chase this year largely stuck with QMs and included a fair amount of mortgages eligible for sale to the ...

Issuance of nonprime mortgage-backed securities picked up in November with new deals from Angel Oak Capital Advisors and Invictus Capital Partners. A $210.2 million MBS from Angel Oak is scheduled to close on Nov. 28 and a $253.1 million deal from Invictus closed last week. The deal from Angel Oak is the third nonprime MBS of the year from the firm and follows closely after a nonprime MBS from Deephaven Mortgage where Angel Oak contributed mortgages with an unpaid ...

Underwriting standards for subprime mortgages tightened somewhat in the third quarter, according to a survey by the Federal Reserve. One of the four banks surveyed by the Fed reported tightening underwriting standards for subprime mortgages in the third quarter while standards at the other three banks were unchanged compared with the previous quarter.The bankruptcy of the parent company of Ditech Financial is unlikely to have an impact on ... [Includes two briefs]

More than three years after standards for qualified mortgages took effect, investors in the non-agency MBS market appear to be getting more comfortable with products that fall outside its bounda-ries. JPMorgan Chase is preparing to issue a large MBS backed by non-QMs that’s similar to deals from several nonbank issuers.

Credit Suisse and MBIA Insurance Corp. continued their wrangling in New York state appellate court in a $235 million MBS securities lawsuit brought by the bond guarantor in 2009.