Originators of non-qualified mortgages are selling product in smaller batches and as whole loans. The reason: better execution than delivering them into MBS.
Angel Oak, a big player in the non-QM market, sees better days ahead, with securitzations leading the way. Fundings at the firm are nearing pre-pandemic levels.
Issuers of expanded-credit MBS haven’t been able to stock deals with new production while one of the largest post-2010 prime non-agency MBS hit the market this week.
Issuance of prime jumbo non-agency MBS was up in 2020 despite a soft fourth quarter, but the expanded-credit mortgage sector lagged, as did securitization of reperforming loans. (Includes three data charts.)
Issuers of prime non-agency MBS are completing deals with mortgages originated after the market volatility of March while expanded-credit MBS continue to be stocked with older loans.
Demand for non-QM MBS has returned to pre-pandemic levels even though the deals include a significant amount of loans in forbearance and fewer protections for investors.
Following in the footsteps of Citi and JPMorgan Chase, Wells Fargo is preparing to issue a non-qualified mortgage MBS. The bank plans to securitize small pools of its non-agency originations on a regular basis.
Is Onity Group eyeing a sale? Perhaps. And why not? Servicing values are approaching a 25-year high.
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