Hoping to buy non-QMs on the cheap for an upcoming securitization? Forget it. The bargains are all gone. The good news: New lending is increasing from severely muted levels.

The real estate investment trust is ready to take non-agency loan aggregation to pre-crisis levels, and believes investors are seeking the types of assets the company offers.

Even though a sizable portion of mortgages originated earlier in the year are in forbearance, investor demand for MBS backed by those loans is strong.

In the first half of 2020, Freddie priced 28 deals totaling $20.73 billion. So far in the third quarter, it has already brought 10 and has 13 transactions on its calendar through September.

Investor demand for non-QM MBS is currently near levels seen before volatility in March, helping to sustain issuance volume. The deal flow could slow soon due to limited originations and economic trends.

Loans backing securitized products are holding up fairly well even though the use of forbearance has increased. A combination of investor protections and changes in underwriting practices is helping.

Priority Financial had sued New Residential for reneging on commitments to buy its production during the height of the pandemic. The company also filed similar charges against Angel Oak.

The economic effects of the pandemic have slowed refi activity for investment properties. That, in turn, has dampened prepayment speeds for 100% investment-property pools, Wells Fargo Securities said.

The deal comprises fully collateralized excess-of-loss reinsurance coverage for MI policies written from July 2019 through March 2020.

Look for originations and securitizations to thrive the rest of the year. As for 2021, the non-QM market could be strong.