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.
Issuance of expanded-credit MBS was expected to remain suppressed after volatility in March halted activity. After a strong second quarter, industry analysts revised their projections.
Hoping to buy non-QMs on the cheap for an upcoming securitization? Forget it. The bargains are all gone. The good news: New lending is increasing from severely muted levels.
The real estate investment trust is ready to take non-agency loan aggregation to pre-crisis levels, and believes investors are seeking the types of assets the company offers.
Investor demand for non-QM MBS is currently near levels seen before volatility in March, helping to sustain issuance volume. The deal flow could slow soon due to limited originations and economic trends.
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.
When the pandemic struck this spring, non-QM sales in progress fell apart involving some heavy hitters like NewRez. Now those loan buyers are getting sued for reneging on their contracts.
Is Onity Group eyeing a sale? Perhaps. And why not? Servicing values are approaching a 25-year high.
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