Improved execution is prompting some issuers to stock non-agency MBS with agency-eligible investment property loans.

The lender completed a capital raise, with plans to originate more residential transition loans and potentially issue MBS.

DSCR and investor loans are seeing strong interest from investors due to the housing market and new rating methodologies.

Redwood Trust’s profits declined from the first to the second quarter, while loan locks and funding reached new highs.

Investors are increasingly turning to the mortgage market to fund their home purchases rather than paying all cash.

The product allows for debt service coverage ratio below 0.75, while many DSCR lenders require a ratio of at least 1.0.

Servicers must adjust their thinking on delinquencies, reserves and collections when the borrower is an investor rather than an occupant.

Investor purchases of single-family rentals are on the rise, with many of the new rentals being owned by smaller independent investors.

Three prime non-agency MBS hit the market this week, largely with loans that were eligible for sale to the GSEs. Two expanded-credit deals also started marketing.

Non-agency MBS issuance more than doubled on a sequential basis in the first quarter of 2024, with jumbo mortgages making up the majority of loans in the deals. (Includes three data tables.)