Nomura is set to enter the market with a deal backed by non-agency mortgages for investment properties while two other issuers also have deals with newer non-QMs. There’s also a rare non-agency MBS with jumbo reverse mortgages.
Non-QM impairment rate declines in April; non-agency forbearance update; Laurie Goodman appointed chair of MFA Financial’s board; White Mountain Capital boosting loan acquisitions; Synergy One offering HELOC with blockchain tech; capital raises and new financing for financing providers that allow homebuyers to make cash offers; Canopy approved by DBRS as due diligence provider.
The top three servicers of non-agency MBS issued during the first quarter of 2021 handled nearly 70% of the market. Shellpoint, the top-ranked firm, alone had a 41% share.
A so-called stressed default rate on millions of residential loans originated between 1990 and 2019 suggests the risks that precipitated the global financial crisis were around long before that, and are growing in the current market.
A reduction in GSE refi business along with regulatory changes are expected to prompt an increase in originations of non-agency mortgages. The bulk of the increase could come from prime loans.
Securitization of mortgages for investment properties increased at Fannie and Freddie in the first quarter even as overall GSE business declined. Lenders appear to have rushed to deliver the loans before new restrictions took effect. (Includes data chart.)
A number of firms are working to increase originations of non-QMs and ramping up investments in the loans. It can be a highly profitable business, though investor demand is volatile.
As an increase in interest rates curtailed its GSE refi volume, Impac is rushing to ramp up originations of non-QMs. The firm also plans to issue its own MBS.
Some 15.5% of applications for jumbo mortgages in 2020 were denied by lenders. Among individual funders, denial rates ranged from a low of 1% to north of 50%. (Includes data chart.)
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