With the potential for interest rates to decline further, originators in the RTL and DSCR space have varying strategies for dealing with volume changes.

Industry participants recently warned against common types of fraud involving DSCR mortgages and residential transition loans.

At a recent conference, lenders discussed what makes a good RTL and DSCR borrower, as well as common mistakes borrowers make taking out investor loans.

Investors in the secondary market are showing strong demand for debt service coverage ratio mortgages, even with delinquencies ticking up.

Players in the non-agency market are touting the benefits of thoughtfully using artificial intelligence for debt service coverage ratio loans and residential transition loans.

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

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

Backflip closed its first residential transition loan securitization last week, a $95 million deal.

Cardinal Capital Group and Ellington Financial separately issued their first residential transition loan securitizations.

The $274.5 million issuance of residential transition loans was oversubscribed nearly five times.