Mortgages in the transaction were acquired by Western Alliance Bank on a correspondent basis and will remain on its balance sheet. Risk-sharing deals in the non-agency market are rare and largely involve megabanks.
Prospects for non-agency MBS issuance in 2022 look mixed, with expanded-credit activity expected to increase while volume involving non-agency jumbos and GSE-eligible loans could decline.
Non-agency MBS issuers are off to a fast start this year, with four deals marketing this week. The MBS are backed by non-agency jumbos and GSE-eligible mortgages for investment properties.
The retail channel share of jumbo originations is coming back down to earth while the broker channel is receiving a boost thanks to United Wholesale Mortgage, among others. (Includes data chart.)
Issuers of prime non-agency MBS are increasingly removing loans subject to third-party due diligence reviews from the final MBS pools. Kroll Bond Rating Agency said the practice is a slippery slope.
With GSE loan limits in high-cost areas nearing $1 million in 2022, Redwood Trust called on the FHFA to use its powers to place limits on the GSEs’ acquisitions of high-balance mortgages.
GSE loan limits will increase by 18.1% in 2022, with a threshold of nearly $1.0 million in high-cost areas, prompting the FHFA to evaluate the relationship between home price appreciation and loan limits.
Non-agency MBS brought to the market in the past two weeks were primarily stocked with jumbo mortgages and GSE-eligible loans for investment properties. There were also a few expanded-credit deals.
Originations of non-agency jumbo mortgages increased by 6.3% from the second to the third quarter. Wells Fargo remained the top jumbo lender, while three firms in the top 10 posted declines. (Includes data chart.)
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