Demand for non-agency MBS has increased significantly in recent weeks after investors fled the market in late March and April. Issuance has been driven by somewhat seasoned non-qualified mortgages.
Arbor Realty Trust issued a $727.2 million non-agency multifamily MBS. For the most part, these deals are uncommon because the GSEs dominate the market.
After non-agency MBS issuance all but froze in March, issuers are beginning to return to the market. Neuberger Berman issued a non-QM MBS this week and others are working on deals as well.
The bulk of non-agency MBS currently being issued is backed by seasoned mortgages. Rating services are also adjusting criteria to account for the coronavirus.
The Fed is taking steps to boost the market for agency MBS and certain sectors of the ABS market, while non-agency MBS isn't receiving direct relief. The Structured Finance Association called for an expansion of the new TALF.
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