Federal regulators should provide incentives for non-agency MBS issuers to standardize deal features, according to Annaly and Barclays. The firms detailed various changes that could help increase issuance.
Issuance of prime non-agency MBS declined in the second quarter on a sequential basis, led by a drop in the volume of GSE-eligible loans going into the non-agency market. Only a handful of issuers were active in the second quarter.
Issuance of MBS backed by fix-and-flip loans is outpacing that of last year, though the market remains small. The largest issuer in the space received a significant investment from KKR.
Varde agreed to sell non-QM lender Deephaven to Pretium, an investment manager involved in single-family rentals along with mortgage credit. Transaction details weren't disclosed.
The company is set to issue the first post-crisis non-agency MBS stocked entirely with home-equity lines of credit. Fitch assigned preliminary AAA ratings to the deal.
Investors in non-agency MBS face increased risks from GSE-eligible mortgages according to Moody's. The loans are allowed to have relatively high DTI ratios while still receiving QM status.
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