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The private label securitization market so far this year has been dominated by mortgages originated primarily by nonbanks, but there is a growing pipeline of mortgages now held in bank portfolios that might provide a rocket-like boost to the nonagency market in the months ahead if interest rates continue to rise.
Market observers interviewed by HousingWire and industry data seem to support that premise, but only time will tell if that private-label rocket launch materializes.
Over the first nine months of this year, it has been nonbanks that have supplied the bulk of the underlying mortgages for private label securitizations. An examination of nonagency residential mortgage-backed security (RMBS) transactions tracked by the Kroll Bond Rating Agency (KBRA) illustrates the nonbank dominance.
So far this year, through mid-October, a depository bank served as the leading mortgage originator for a private label securitization in only 13 of 161 deals tracked by KBRA. Flagstar Bank was the leading originator in 10 of those transactions and Wells Fargo in three deals, while a nonbank was the leading originator in 148 of the nonagency RMBS transactions tracked by KBRA over the period.
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The post Rising mortgage rates could trigger more private label deals appeared first on HousingWire.
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