Tuesday, September 23, 2025
Robust issuance of residential mortgage-backed securities backed by loans that fall outside Qualified Mortgage standards continues, punctuated by a nearly $700 million transaction from an Annaly Capital Management Inc. subsidiary. Fresh activity also featured deals involving Goldman Sachs, AmWest Funding Corp. and Wells Fargo Securities LLC, underscoring persistent strength across the non-QM segment.
A trio of recently finalized residential mortgage-backed securities transactions containing closed-end second liens included a deal from Mr. Cooper with a low weighted-average coupon and combined loan-to-value ratio, an issuance aggregated by PIMCO with a low WAC, and a mostly first-lien securitization from Verus Mortgage Capital with a few junior-lien loans.
After a nearly two-decade break from the home-equity securitization arena, Nomura has launched a residential mortgage-backed securities deal filled with closed-end second mortgages carrying a combined loan-to-value ratio above recent averages but supported by a notably lean debt-to-income ratio. The weighted-average coupon on the offering stands 58 basis points lower than similar current CES transactions.
Signs of a softening labor market and persistent inflation spurred the Federal Reserve to cut its benchmark rate by a quarter-point, triggering a wave of prime benchmark adjustments at major banks. Home-equity line-of-credit borrowers tied to prime should see payment relief soon, while fixed rates on closed-end second mortgages may...
Another two-step residential mortgage-backed securities transaction containing home-equity lines of credit from Figure Lending LLC is scheduled for next week, showcasing a notably high combined loan-to-value ratio. Stronger borrower credit scores and slightly leaner debt-to-income levels counterbalance the elevated leverage. The company's chairman said lenders are earning more on some...
Residential mortgage-backed securities composed of closed-end second mortgages from Rocket Mortgage LLC feature a weighted-average coupon that is modestly higher than recent CES securitizations, while credit risk indicators remain closely aligned with overall market norms.
Two residential mortgage-backed securities issuances containing loans outside qualified mortgage standards are nearing pricing and a third deal recently wrapped up, pushing 2025 non-QM issuance beyond $21 billion. The transactions carry modest credit risk, while weighted-average coupons sit within 11 basis points of the quarter’s mean.
Rising home-equity line of credit balances at smaller banks more than offset a month-over-month reduction at the nation’s largest depositories, producing a year-over-year increase exceeding $13 billion for all U.S. commercial banks.
By COVIANCE Community home-equity lenders have a timely opportunity—but seizing it requires a more strategic approach. Success will come from moving beyond mass marketing, delivering personalized messaging, and simplifying the borrower experience.
The home equity lending industry is facing a pivotal moment. At a time when U.S. homeowners are sitting on close to $35 trillion in equity and struggling to pay off over $1 trillion in credit card debt, home-equity lending processes...
