MBS

Purchasing mortgage-backed securities—and that strategy is not out of the question as the central bank works to promote equilibrium in the housing markets over time.

Together, the deals OBX programs will issue about $850.5 million in prime jumbo and non-prime RMBS paper, and are expected to close on May 10.

Almost the entire deal will issue notes through a senior-subordinate capital structure repaying principal sequentially, instead of on a modified sequence.

With ADFITECH as a held company now, Mortgage Connect says it is well equipped to be a linear provider of credit, compliance and servicing review services.

Lenders financed the properties through first-lien, fixed-rate mortgage loans, most of which were on 30-year terms extended to prime borrowers, many self-employed.

Anticipation of the Federal Reserve’s balance-sheet reduction is weighing on bonds backed by mortgages, but the actual event may make them an attractive alternative to corporate debt.

Only about 1.0% of the mortgage assets in the collateral pool are for the respective borrowers’ personal use, and qualify as mortgages under Regulation Z.

Secured by a single Morgan Stanley first-lien mortgage, the SFR is the largest deal since the program priced its $2 billion transaction in July 2021.

Non-QM assets overlap almost perfectly with the portion of loans, 52%, financing properties where the borrower intends to maintain as a primary residence.

The current program, which included more than 580 separate operations to buy Treasuries and 1,200 to purchase mortgage-backed securities, has dwarfed all three of the Fed’s previous quantitative-easing programs combined.

Athas Capital Group originated the mortgages, which have an average balance of $408,350, and an average weighted average (WA) original term of 362 months.

About 58.1% of the loans are in California, while two California cities -- Los Angeles and San Diego -- make up the pool’s largest MSA concentrations.

If the minimum CE test or the delinquency test is not satisfied, then 100% of the scheduled and unscheduled principal will be allocated to the senior tranche.

Performing and re-performing loans are in the pool, as well as fixed, adjustable-rate and step-rate loans, and fully-amortizing balloon and interest-only mortgages.

Treasury dealers and investors are busy trying to predict exactly when the Federal Reserve might pull the trigger on cutting the size of its balance sheet and how big that drawdown could be when it does.

In addition to being almost entirely composed of investment-purpose mortgages, about 100% of the pool’s 2,175 mortgages are agency eligible.

Debt issued by states to finance low-interest loans for first-time home-buyers or build affordable housing carry higher yields and are less volatile, so they typically perform better than other muni sectors when rates rise, said Peter DeGroot, head of municipal research and strategy at the biggest U.S. bank.

The Morgan Mortgage Trust platform has had a SOFR tranche on every previous 2021 deal, generally pricing with a spread of about 95 basis points over SOFR.

Since the pandemic began, there have been fewer active managers buying the less liquid types of securitized debt, creating big opportunities for bargain hunting in securities like mortgage bonds and collateralized loan obligations, hedge fund Ellington Management Group says in a new report.

The enormous issuance is backed by a single loan secured by first-priority mortgages on a pool of about 6,148 single-family rental homes, and 299 townhouses.