The ARM and IO share of loans in expanded-credit MBS increased in the second quarter. The volume of loans produced through the correspondent channel and for investor properties declined. (Includes three data charts.)

Only two non-agency MBS hit the market in the past two weeks: a non-QM deal from PIMCO and a deal from Starwood Property.

Velocity, which focuses on loans for investment properties, is working on obtaining warehouse financing without mark-to-market provisions.

Non-agency forbearance increases; prices for luxury homes fluctuate; PCMA sees strong interest in new non-QMs; Angel Oak and Citadel offer loans underwritten with 12 months of bank statements; former Redwood Trust president moves on to rent-to-own provider.

After a pause for about four months, Citadel Servicing and Verus Mortgage Capital have re-entered the non-qualified mortgage market. But Citadel is no longer offering non-QMs based on one-month bank statements.

GSE business in various noncore categories increased during the second quarter as lenders turned their focus to agency business. (Includes data chart.)

The REIT’s aggregation of non-agency mortgages typically dwarfs its business-purpose lending activity, but that wasn’t the case in the second quarter of 2020.

A lack of standardized reporting is causing problems for non-agency MBS investors. In one non-QM MBS, research firm dv01 found 233 loans that had been modified while the trustee reported only 41 mods.

After increasing in March, April and May, the delinquency rate on securitized non-QMs declined in June. Now servicers are grappling with forbearance plans that are expiring.

MFA and Western Asset Management took losses on non-QMs in 2Q. Anworth is in a holding pattern and Starwood is buying non-QMs at a discount.