Capital markets

Interest rate increases and economic concerns led the government entity to lower the required amount from $1 million to $250,000.

Average scores remain unchanged but signs of payment stress keep emerging, with Fannie Mae's serious delinquency rate up for the first time since August 2020.

Foreclosure prevention actions overall fell for the sixth time in seven months in October, according to the FHFA.

The latest month's volume was more than $20 billion lower than in March 2020.

The sector is not immune to the same economic instability that affects the single-family residential market, the Mortgage Bankers Association said.

Other investors could step into the breach as depositories depart, and the strain on nonconforming borrowers might not be that bad, recent forecasts suggest.

The consensus calls for shrinking collateralized loan obligation volume in 2023, but rewards are said to outweigh the risks.

Loans with payments late by a year or more were the biggest sub-category within the distressed portfolios a year ago, but now mortgages that've been late for 30-59 days are.

The products are currently limited to a single distribution channel, but the company hasn't ruled out offering them through third-party originators in the future.

Deterioration in credit quality should put strain on collateral originated in late 2021 and early 2022, affecting performance, Barclays Credit Research said.

These types of transactions largely disappeared from the market for years after the Great Recession.

Prime mortgage activity fell notably while nonprime deals and government-sponsored enterprise credit risk transfers increased in 2022, according to Kroll Bond Rating Agency.

However, a tiered pricing system will limit an inflation-driven increase to under 10% for a small group of originators.

Nonbanks will probably see the least change, while securitization lenders, depositories and REITs are likely to experience the most, an Urban Land Institute survey suggests.

Scores will be assigned to all loan pools created since 2010, including future securitizations, and are expected to help investors determine the share of mortgages meeting specific characteristics.

The government mortgage-bond insurer's requirements that restrict investor involvement are likely the greatest challenge to finding more purchasers of MSRs, experts said at a servicing conference Monday.

The company was profitable on a net basis but took a comprehensive loss linked to market volatility's effect on mortgage bonds.

The company is floating the possibility of selling a portion of its loan portfolio to free up liquidity in coming months, leaders said.

The government-sponsored enterprise put more money aside as mortgage interest rates rise and home prices start to decline.

They have a range of positions in the mortgage market; and some investors believe they could be bought at a discount now, potentially gaining value later when interest rate stability returns.