The non-agency securitization market for closed-end seconds has grown substantially in the past year as lenders look to expand their product offerings with refinance business limited.
An uptick in securitization of jumbo and GSE-eligible loans helped increase total non-agency MBS issuance in the second quarter. (Includes data tables.)
The $2.5 billion cap for Freddie’s pilot program to buy closed-end seconds should limit impact on the non-agency secondary market. But industry players worry about the long-term risks if the pilot is successful.
John Beacham, CEO of Toorak Capital Partners, said ratings on fix-and-flip securitizations are attracting more investor interest and prompting better pricing for issuers.