Private-label

An early look at securitized residential home-loan performance amid the coronavirus pandemic indicates encouraging trends thus far in impairment levels of non-qualified mortgages, according to a new report from investor analytics firm Dv01.

Ocwen Financial has approximately $749 million of liquidity from various sources to deal with servicing issues arising from the coronavirus, a company press release said.

The two deals continue a late-year surge of private-label RMBS deal volume totaling $8.37 billion priced since Oct. 1.

Lenders have bundled more than $18 billion worth of non-QM, private-label loans into bonds this year that they then sold to investors, a 44% increase from 2018 and the most for any year since the securities became common post-crisis.

With prospects for government-sponsored enterprise reform improving, players in the private residential mortgage-backed securities market are starting to think about how they could better compete against the GSEs while awaiting change.

Private-label mortgage securitizations with variable servicing fee arrangements could become more common going forward as issuers look to increase investor cash flow while reducing the loan servicer's economic exposure, Fitch said.

Non-qualified mortgage-backed securities record issuance in the first quarter puts it on pace to top full-year volume predictions, according to Keefe, Bruyette & Woods.

Liquidity, products and pricing are the main concerns for the secondary mortgage market in 2019.

Although forecasts anticipate a continuing drop in overall originations, private-label residential mortgage-backed securitizations backed by newer loans are expected to keep increasing through next year, according to Bank of America.

Rating agencies are sparring over a new feature in a private-label RMBS that upends the relationship between senior and sub bondholders.