loanDepot is preparing to issue a non-agency MBS stocked with scratch-and-dent mortgages.

Securitization of home equity loans increased again in the first quarter, driven by closed-end second liens. Issuance is growing exponentially, helped by nonbanks and investor demand. (Includes two data tables.)

Ratings for MBS with residential transition loans are helping to increase investor demand.

A New York Federal Reserve study found that the secondary market loan sales could help boost capital at CDFI-approved lenders.

Figure is expected to issue its third HELOC MBS of 2023 and will provide loans to an upcoming Saluda Grade issuance.

New jumbo issuance from Chase, Goldman Sachs and Redwood Trust kick off the fourth quarter.

At one point, First Republic Bank was a major contributor to non-agency MBS. In recent years, the bank retained its production, though JPMorgan Chase could move to sell the loans.

Prime jumbos are unlikely to account for the majority of non-agency MBS issued this year, a first for the products since the time before the financial crisis. Non-QM MBS issuance is holding up better and second-lien securitizations are building some momentum.

AB CarVal Investors and Ares Management are in the market with separate expanded-credit MBS, marking the first time either firm has offered that type of MBS.

KBRA said that third-quarter MBS issuance volume didn’t meet its expectations and will drop rapidly in the coming year. Meanwhile, both DBRS and Moody’s noted that performance is stabilizing.