October was the busiest month of the year for non-agency MBS issuance. Activity has been limited thus far in November, though there are plenty of deals in the pipeline.
Attendance at the ABS East conference hit another record this week, with investors showing strong demand for structured finance products. Issuance is expected to remain elevated, helped by interest rate moves.
Issuance of MBS with non-qualified mortgages is growing even as insurance companies increase their purchases of non-QMs as whole loans. Investor demand for the products looks likely to remain strong.
Fitch Ratings sees relatively smooth sailing for residential MBS this year while times are tough in the CMBS market, and the worst could be yet to come.
Close to half of the prime non-agency MBS volume in the market since early May has been in GSE-eligible mortgages. Rocket Mortgage is the latest issuer with a GSE-eligible offering, including a number of loans with eNotes.
Goldman is a leading issuer of prime non-agency MBS and an issuer of expanded-credit deals. The firm aggregates loans from various lenders for securitization.
Demand in the secondary market for non-qualified mortgages is helping to fuel originations of the loans. Delinquencies in the sector have ticked up but aren’t yet a major concern.
Investors can’t seem to get enough non-agency MBS. Issuance is booming and demand is expected to remain elevated thanks to the outlook for interest rates, among other factors.
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