Six years after the financial crisis, the recovery in issuance of non-agency residential mortgage backed securities remains anemic and disappointing.
There have been approximately 50 prime transactions issued since the market re-started in 2010. Most of that volume placed over the past 24 months. The market’s recovery continues to face serious headwinds including the ongoing dominance by Fannie Mae and Freddie Mac, strong portfolio demand for high quality mortgage assets, and challenging securitization incentives. The result is a sector that continues to decline as new issue supply fails to keep pace with amortization of legacy transactions.