Issuance of non-agency MBS and ABS is still being completed, but at a slower pace. Spreads have widened for new deals along with trading in the secondary market.

A longer statute of limitation and increased disclosure requirements could help attract long-term investors in the MBS and ABS market, industry experts recommend.

If the non-agency MBS market wants to avoid harsh regulations, it should seriously consider self-governance as an option, the Structured Finance Association believes.

The SEC’s Office of Credit Ratings is exploring how it can address conflicts of interest in ratings of MBS and ABS. An increase in performance-related disclosures and boosting unsolicited ratings are being considered.

Investor demand for MBS and ABS is high but then uncertainty is also increasing, which could prompt more issuance earlier in the year.

Federal regulators should make changes to capital requirements that would allow banks to complete credit-risk transfer transactions similar to the deals issued by the GSEs, according to industry participants.

A noticeable increase in warehouse credit to non-QM originators is bolstering both lending volumes and MBS creation. Another positive: better terms for nonbank borrowers.

Banks will no longer have to meet extensive disclosure requirements for their MBS deals to receive investor-friendly protections. The change was met with criticism from an Obama appointee to the FDIC’s board.

Six non-agency MBS backed by newly-originated mortgages have been introduced since the beginning of the year. Issuance is ramping up after a slow December.

REITs with non-agency operations look attractive to stock analysts as the Trump administration works to decrease the footprint of the government-sponsored enterprises. REITs cited as “top picks” include Ellington, New Residential and Starwood.