The business-purpose lender’s origination volume was down 14.1% on a quarterly basis in the fourth quarter, though income increased by 37.1%.

Lenders that focus on non-qualified mortgages are optimistic that originations will continue to increase this year.

Recent cases involving subprime auto lender Tricolor and auto parts manufacturer First Brands prompted the initiative.

Morningstar DBRS has rated 30 securitizations involving residential transition loans since introducing rating criteria for the asset class in August 2023.

Industry participants discussed factors that led to debt service coverage ratio loans becoming commonplace last week at a conference.

After significant increases in securitization of residential transition loans in recent years, volume could decline this year.

Some 10 non-agency MBS have hit the market thus far in January, with issuance spread across loan types.

Legislation could prompt a study by the GAO to see if a secondary market for securitizations of acquisition, development and construction loans would help increase the supply of new-built homes.

The real estate investment and property management firm’s securitization is sized at $282.4 million.

The issuance follows a large securitization of home equity investments by Unlock Technologies and Saluda Grade.