Question · Q3 2025
Trevor John Cranston asked about the refi responsiveness within the non-agency OBX securitization portfolio as mortgage rates have declined, and the return sensitivity on subordinate positions to faster prepayment speeds.
Answer
Mike Fania, Co-Chief Investment Officer and Head of Residential Credit, noted that 2023 vintage OBX deals are paying slower than anticipated, partly due to prepayment penalties on investor loans. He added that the actual return profile on retained transactions has been higher because speeds have been slower than forecasted assumptions.