Secondary markets

The government-sponsored enterprises will likely have their mainstay bonds exempted from the potential securitization-related rule, but their credit-risk transfers could be subject to it, some experts say.

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.

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.