Increased expanded-credit issuance bolsters non-agency MBS market

“While expanded-credit MBS issuers faced lower profitability amid rising interest rates and reduced demand from investors, they piled into the market,” Inside Mortgage Finance noted in a report. “In some cases, investors changed deal terms to their advantage with originators having little in the way of bargaining power.”

Read more: Long Run Partners enters securitization market with first non-QM MBS deal

Last week, a new non-QM investor came into the securitization market with a $331.5 million MBS. The transaction, which received preliminary AAA ratings from Fitch, is collateralized by a pool of 525 non-prime mortgages that have seasoned for an average of five months.

In February, non-QM leader Angel Oak Mortgage issued a $537.6 million MBS backed by 1,138 non-QM loans. The deal marks Angel Oak’s eighth securitization since its IPO launch.