The lender is increasing its originations of non-QMs, which helped it generate a profit for the third quarter. Still, non-QM pricing declined early in the fourth quarter and there are additional costs tied to originating the loans.
The largest non-agency MBS on offer in the past two weeks was a $762 million deal from United Wholesale Mortgage. Barclays Capital is also set to issue an expanded-credit MBS.
Number of non-agency mortgages in forbearance increases; Securent offering loan-defect insurance; Filo Mortgage launches jumbo offering; Lakeview Loan Servicing partners with Silver Hill Funding.
GSE loan limits could go up by 20% next year, reducing the share of loans that could be non-agency jumbos. Even with lenders offering higher GSE loan limits in advance, Redwood hasn’t seen much of an impact.
Non-agency MBS can generate returns in the mid-teens, according to some issuers. Also, a reduction of limitations placed on the GSEs isn’t expected to slow non-agency MBS issuance of GSE-eligible loans.
Originations of non-agency mortgages for residential investment properties increased by nearly 60% in the third quarter at Velocity. The lender also received a record amount of loan applications in October.
Non-agency mortgage lenders face uncertainty as the new CFPB director could choose to revise the QM standards established during the final months of the Trump administration.
Shellpoint was named as servicer on $7.31 billion of non-agency MBS issued during the third quarter. Cenlar, a major subservicer in the sector, is under a consent order with the OCC. (Includes data chart.)
Chase and Rocket are offering separate non-agency MBS sized at more than $1.0 billion each and stocked with jumbo mortgages. There’s also plenty of GSE-eligible loans for investment properties in the market.
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