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KBRA Releases Research – Will the PLS Market Say ‘Yes’ to Agency ‘NOO’ Properties?

Friday May 14, 2021. 09:01 PM , from Digital Pro Sound
NEW YORK–(BUSINESS WIRE)–Kroll Bond Rating Agency (KBRA) releases research following the Treasury Department’s January announcement to limit the GSEs’ acquisition of single-family mortgage loans secured by non-owner occupied (NOO) properties. In this report, we examine the relative size of these GSE (Fannie Mae and Freddie Mac) purchase limitations across RMBS markets, recent issuance trends, and historical performance for these loans compared with the more typical owner-occupied loans.

Key Takeaways

As a result of the GSE 7% purchase limitation, KBRA expects RMBS PLS issuance of NOO-secured Agency-eligible loans to expand meaningfully, potentially by an estimated $10 billion-$20 billion in annual volume as originators look for alternative buyers.

Historically, performance of loans backed by second homes have tended to outperform owner-occupied loans, while investment property loans have generally underperformed, particularly in periods of stress, such as the global financial crisis.

Recent issuance consisting solely of prime, Agency-eligible investment property loans has performed relatively in line with the overall prime RMBS sector, even through the pandemic.

Click here to view the report.

Related Publications

RMBS Credit Indices


KBRA Credit Brief: Mortgage Rates—How Low Can They Go?

About KBRA

KBRA is a full-service credit rating agency registered in the U.S., the EU and the UK, and is designated to provide structured finance ratings in Canada. KBRA’s ratings can be used by investors for regulatory capital purposes in multiple jurisdictions.


Jack Kahan, Senior Managing Director
+1 (646) 731-2486

Ashish Sharda, Senior Director
+1 (646) 731-2415

Armine Karajyan, Director
+1 (646) 731-1210

Patrick Gervais, Managing Director
+1 (646) 731-2426

Business Development

Michele Patterson
+1 (646) 731-2397

The post KBRA Releases Research – Will the PLS Market Say ‘Yes’ to Agency ‘NOO’ Properties? first appeared on Digital Media Net.

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