The non-agency market hasn’t lived up to the hype, according to Mat Ishbia of United Wholesale Mortgage, which saw a drop in non-agency lending. The overall sector, meanwhile, saw higher production and gained market share in the second quarter.
Angel Oak Mortgage suffered widening losses in the second quarter amid weak demand in the secondary market for non-QMs. Still, officials at the REIT suggest that things are looking up.
For the first time since May, a non-agency MBS with GSE-eligible mortgages for investment properties hit the market. And Change Lending switched products with its latest offering, focusing on mortgages with income verification. Overall, issuance remains slow.
The traditional leaders of contributions to expanded-credit MBS slowed their activity in the second quarter, with smaller entities filling some of the void. The types of loans going into MBS also shifted somewhat. (Includes three data charts.)
Annaly is seeing strong returns from its aggregation and sales of non-agency mortgages even with weak demand in the secondary market. The REIT boosted its non-agency MBS issuance with plans for further growth.
MFA Financial took another loss in the second quarter as its holdings of non-QMs lost value and MBS with the loans was met with weak demand. The nonbank’s business-purpose lending unit also took a loss.
After a nearly 30-day lull, MBS with prime jumbos hit the market. An offering from Chase was significantly smaller than the issuance from the firm in the past. A number of expanded-credit MBS are also on offer.
Two prominent non-QM lenders failed in recent months amid volatility in the market. Non-agency aggregators suggest that the issues were lender-specific and the market is improving.