The $500 million deal allows financing of non-QMs. Moody’s placed a preliminary A1 rating on the deal, while it typically gives a AAA rating on warehouse funding securitizations that focus on GSE-eligible loans.
The REIT sources the bulk of its acquisitions of non-QMs from lending units affiliated with Angel Oak Companies, leaving more time for asset management and securitization activities.
In the past two weeks, $2.74 billion of non-agency MBS were gobbled up by investors. GSE-eligible mortgages for non-owner-occupied properties accounted for half of the dollar volume in the deals.
After a narrow loss in the first quarter, Impac boosted its non-QM originations, but the nonbank’s loss widened in the second quarter. Still, officials at the company are optimistic about the sector.
Jumbo mortgages and non-qualified mortgages can generate better margins than agency products. Still, the loans don’t necessarily offer a guaranteed path to profits.
Annaly’s new conduit is acquiring non-QMs along with GSE-eligible mortgages for investment properties. Previously, the REIT’s main avenue for acquisitions was through bulk purchases.
Angelo Gordon Mortgage Investment Trust expects returns as high as 18% from securitizing non-QMs. The REIT and others are working to increase their acquisitions of the loans.
More than a year after volatility from the coronavirus disrupted operations for many non-QM lenders, new products are being launched and underwriting standards are being relaxed.