The appetite for riskier mortgages is rising, and a small cadre of investment firms is ready to feed it. Angel Oak Capital Advisors just announced its second rated securitization of nonprime residential mortgages this year, a deal worth just more than $210 million and its largest ever. Its first deal was slightly less, but demand from borrowers and investors alike is growing, and the securitizations are growing with it.

Angel Oak is one of very few firms offering these private-label mortgage-backed securities -- the ones that were so very popular during the last housing boom and which were later blamed for the financial crisis.

Today's nonprime loans, however, are nothing like the ones of the past. The government cracked down on faulty loan products, those with low teaser rates, negative amortization and no documentation. Still, for the past decade investors wouldn't touch anything that wasn't government-backed. Only now are they seeing value and dipping their toes in again.

Haha--"nothing like ones of the past", except, of course, involving very little (to no-)money down and being taken out at inflated valuations, leading to quickly being underwater when the market turns...

Looks peaky to us...

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