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Mortgage companies in the U.S. issued $21 billion of mortgage-backed bonds in October, the second heaviest month of borrowing since the 2008-09 financial crisis, according to research by Bank of America Corp.

One reason: It is cheaper for many companies to borrow in the “private-label” market than to issue bonds guaranteed by government-sponsored enterprises Fannie Mae and Freddie Mac. The lower-cost funding is prompting home-loan originators such as loanDepot Inc., as well as real estate investment trusts, or REITS, to tap the market, said Pratik Gupta, head of residential mortgage-backed securitization research at Bank of America.