Market Update

Angelo Gordon Brings MBS with Slightly Seasoned Non-QMs

July 21, 2020

An affiliate of Angelo Gordon and Co. is set to issue a $226.9 million mortgage-backed security with product that has seasoned for an average of five months.  About half of the loans are non-qualified mortgages.

The MBS looks similar to previous deals from the firm, save for the now common occurrence of mortgages in forbearance.  Some 10.1% of loans are in forbearance and another 1.8% have received deferrals, according to S&P Global Ratings.

As with previous MBS, Angelo Gordon sourced some mortgages from community development financial institutions, a maneuver that can reduce the risk retention required for securitization.  Almost 29% of loans were originated by Commerce Home Mortgage and Quontic Bank, two CDFIs.  Overall, the mandatory risk retention was reduced to 3.57% from 5%.

LoanStream Mortgage is the top contributor to the deal with a 28.4% share, followed by Arc Home Loan at 28.3%.  Servicing will be handled by Shellpoint Mortgage Servicing.

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