The MBS and ABS market was a mixed bag in terms of new issuance during the second quarter, as overall production was down slightly from the beginning of the year, according to a new analysis by Inside MBS & ABS. A total of $430.98 billion of single-family MBS, non-mortgage ABS and commercial-property securitizations was issued in the second quarter, down 2.6 percent from the first three months of the year. That pushed year-to-date issuance to $873.47 billion, up 8.1 percent from the first six months of 2016. Single-family MBS accounted for a hefty 75.1 percent of total issuance so far in 2017, with non-mortgage ABS (13.2 percent) and commercial MBS (11.7 percent) making up the rest. But single-family turned...[Includes three data tables]

Near the end of the second quarter, Credit Suisse resumed its activity in the non-agency MBS market after a lengthy pause. In May, the investment bank unveiled a $91.18 million deal backed by seasoned FHA loans. That was followed by a $393.97 million issuance backed by seasoned mortgages at the end of June. Credit Suisse marked its return to the jumbo MBS market in June – not as an issuer but as a depositor – lending its shelf registration to American International Group for a $511.98 million MBS. The bank faced...

Issuance of nonprime mortgage-backed securities skyrocketed in the second quarter, and analysts anticipate that the market is set for more growth. A total of $1.08 billion of MBS backed by newly originated nonprime mortgages was issued in the second quarter of 2017, according to Inside Nonconforming Markets. It was the strongest post-crisis quarter for the sector, which has been percolating since the second half of 2015. Issuance in the April-June cycle ... [Includes one data chart]

Issuance of prime non-agency mortgage-backed securities cooled off somewhat in the second quarter of 2017 after a relatively strong showing in the previous period. Three deals totaling $1.88 billion were issued in the second quarter, a 27.6 percent drop from the first three months of the year, according to Inside Nonconforming Markets. However, activity in the first half of this year outpaced the first half of 2016, as the dollar volume of issuance was ... [Includes one data chart]

A unit of Angel Oak Companies issued its largest nonprime mortgage-backed security this week. The deal comes shortly after a significant amount of mortgages from Angel Oak were included in a separate nonprime MBS from Deephaven Mortgage. The $210.45 million Angel Oak Mortgage Trust I LLC 2017-2 received AAA ratings from DBRS and S&P Global Ratings. Angel Oak has issued three other nonprime MBS, the largest of which was a $150.35 million transaction in 2015 ...

Flagstar Bank recently received assessments by Fitch Ratings of the bank’s origination platform and servicing operations. The ratings could signal increased involvement in the jumbo mortgage-backed security market by Flagstar. Fitch assigned an “average” rating to Flagstar’s origination platform. “Notable strengths of Flagstar’s origination platform include its experienced senior management team and staff, robust loan sourcing strategy, and comprehensive underwriting ...

According to Morningstar Credit Ratings, the weighted-average loan-to-value ratio for securitized non-QMs is 75.2 percent and the average debt-to-income ratio is 36.6 percent

Meanwhile, Redwood is working toward issuing a jumbo MBS from its “expanded prime” program…

An analysis of non-qualified mortgages suggests that many of these borrowers have credit qualities strong enough to qualify for a mortgage that could be delivered to the government-sponsored enterprises. However, issues involving credit events and income documentation can disqualify such borrowers from conventional mortgages. According to an analysis by Morningstar Credit Ratings, the weighted-average loan-to-value ratio for securitized non-QMs is 75.2 percent and the average debt-to-income ratio on the loans is 36.6 percent. The rating service noted that QMs (including agency and non-agency mortgages) have an average LTV ratio around 69.0 percent and an average DTI ratio around 32.3 percent. In addition to showing that certain characteristics don’t differ much between QM borrowers and non-QM borrowers, the analysis suggests...

The rating service said investors should have access to the reviewer’s findings or access to other information that would help determine if a breach should be pursued.