Issuance of expanded-credit MBS flowed in the first half of the year even as lenders grappled with higher interest rates. Issuance is expected to slow as lenders work to establish a new supply of loans with higher interest rates.
After a two-week lull in issuance of jumbo MBS, a handful of deals hit the market. MBS issuers are facing weak demand from investors, with whole-loan outlets often offering better pricing.
Moody’s downgraded some of the tranches in loanDepot’s outstanding warehouse financing securitizations even after the company modified the transactions’ governing documents to meet new criteria.
While investors in fix-and-flip and other business-purpose loans are taking a closer look at loan characteristics and lenders’ practices, lenders are adjusting and considering locking in longer-term financing.
Most companies that issued non-agency MBS with GSE-eligible investment-property loans during the fourth quarter haven’t offered similar deals thus far in 2022.
Spreads on non-agency MBS issued early this year were wider than the pricing seen near the end of 2021. Industry participants witnessed volatility in the broader financial markets along with an increase in the supply of non-agency MBS.
The creation of a U.S. sovereign wealth fund could grease the skids for an end to the conservatorships of Fannie Mae and Freddie Mac.
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