SFA’s Research Corner

SFA’s Research Corner reviews non-agency RMBS and the recent trends in cash-out refinancings, a loan product that was prevalent in the run up to the 2008 housing crisis. While levels of cash-out refi’s have risen in RMBS pools—29% in 2022 of non-agency deals according to KBRA data—the characteristics of the underlying loans are very different—70% of recent borrowers have credit scores above 760 and the overall cash extracted is less than 60% of the amount cashed out in 2006, according to the Fed.

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