Impac Mortgage Holdings (IMH)

[dpsimswm]

KBRA: Backlog Of Redeemable Non-QM Securities Growing
David Krechevsky
OCT 21, 2022

KEY TAKEAWAYS
A total of 27 securitizations, with a combined outstanding balance of $3 billion, are redeemable but have not yet been called.
Homeowners thinking about refinancing their mortgages are growing increasingly reluctant, since mortgage rates have more than doubled in the past year.

Why refinance when the rate on your current mortgage is better than the rate you’d get with a refinanced loan?

A similar problem now affects securitizations of non-qualified (Non-QM) mortgages.

In a report issued earlier this month, Kroll Bond Rating Agency LLC (KBRA) noted there is a growing backlog of Non-QM residential mortgage-backed securities (RMBS) that are “callable” or “redeemable,” but have not yet re-entered the market.

According to the report, 27 securitizations, with a combined outstanding balance of just under $3 billion, are redeemable but have not yet been called.

It’s a problem that has grown in the past year, and one that reflects both the volatility of the securities market and the increasingly poor market for securitizing Non-QM loans.

“Notably, only 12 of 31 transactions that became callable based on their earliest optional redemption date were redeemed between August 2021 and September 2022,” the report states, which means 19 were not redeemed. “Additionally, eight more transactions that, though they had not yet reached their earliest optional redemption date, were callable based on their collateral pool factors … were not redeemed.”

https://nationalmortgageprofessional.com/news/kbra-backlog-redeemable-non-qm-securities-growing