Ellington Financial Mortgage Trust issues non-QM securitization deal

Approximately 58.1% of the loans were categorized as non-QM, while the remaining loans were classified as exempt from the ATR/QM rule, having been originated for a business purpose such as investment properties.

However, demand for non-agency MBS seems to be weakening. According to data from Inside Nonconforming Markets, mortgage companies issued $21.35 billion of non-agency MBA in the second quarter, down 39% from the previous quarter.

“Rising interest rates have led to diminished demand for MBS that are backed by loans originated at below prevailing rates,” trade publication Inside Mortgage Finance wrote in a report. “Given the amount of time it takes for issuers to accumulate enough mortgages to make a securitization profitable, loans in non-agency MBS have often seasoned for at least two months by the time a deal starts marketing.”