The lender took millions of dollars in reserves for potential buybacks and litigation involving the bank’s now shuttered non-QM program.

The impairment rate on non-QM MBS increased by more than five times in April as borrowers felt the side effects of the coronavirus. The worst performing non-QM loans were those to self-employed borrowers.

Touting its experience servicing distressed subprime mortgages, Ocwen is looking to acquire delinquent loans. (Includes data chart.)

Four deals were brought to the market in the past two weeks and more are in the works. However, issuance will slow as the recent activity was backed by loans originated before non-QM lenders halted production.

Wells Fargo is set to issue a $478.1 million jumbo MBS, marking only the second deal of the quarter.

After taking a couple of months off from originating mortgages, Impac is back. However, the lender is avoiding non-QMs for the moment.

The re-proposed capital requirements for the GSEs could prompt a shift in activity toward the non-agency market. The devil is in the details.

CFPB issues proposed rule for LIBOR transition; non-agency forbearance rate declines; Chimera turns to alternative financing; Invictus launches commercial lender; SFA shifts date for annual conference.

After issuance ground to a halt in March, five non-QM MBS deals came to the market in May and more are on the way. Transactions have been stocked with slightly seasoned mortgages.

Among the lenders currently offering non-QMs, underwriting standards are tighter and interest rates on the loans are higher than earlier in the year. Industry participants are optimistic that the sector will rebound, eventually.