Rising interest rates had a major impact on non-agency MBS issuance in the second quarter, with volume down nearly 40% on a sequential basis. Expanded-credit MBS issuance held up better than prime volume, though the ECM sector is now in turmoil. (Includes data chart.)
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Two prominent non-QM lenders ceased operations in the past two weeks amid weak demand for the loans. Still, other market participants are stressing that they remain in strong operating positions.
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Shortly after lenders adjusted to QM standards set in December 2020, the CFPB is initiating a review of the standards. Significant changes appear unlikely, though the seasoned QM option could be eliminated.
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Western Alliance Bank sold first-loss exposure on a pool of mortgages with an unpaid principal balance of $3.88 billion. The mortgages were acquired from various correspondent sellers and include many non-agency jumbos.
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PRP Advisors issued its first non-agency MBS with newly originated mortgages for investment properties. To this point, Balbec’s non-agency MBS issuance has focused on seasoned mortgages.
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