Expanded-credit MBS issuance declined by nearly 50% in the fourth quarter compared with the previous quarter. Prime MBS issuance fared even worse, essentially freezing during the final months of the year. (Includes data chart.)
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Wells Fargo was a major player in the jumbo correspondent channel, with a nearly 20% market share. A handful of banks have a strong presence in this category, while nonbank competitors have faced hurdles.
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Non-agency MBS issuance perked up in early January as investor demand improved. Redwood Trust offered a jumbo MBS after a year-long lull in issuance and expanded-credit MBS issuers priced deals at tightening spreads.
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The impairment rate on securitized non-QMs posted its largest one-month jump in November since the early days of the pandemic. Hurricane Ian was a factor.
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Going forward, the FHFA will seek public comments when the GSEs are looking to launch new activities or products. There are also some broad exceptions to the public notice standard.
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In October, new standards for qualified mortgages took effect. It turns out that a provision in the final rule also applies to non-QMs, which could limit originations of loans where lenders look at only a small number of a borrower’s bank statements.
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Efforts by the MBA and other industry participants to get the California Supreme Court to overturn a lower court’s ruling failed near the end of December. Servicers in the state are now limited on the amount default interest they can charge.
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