Underwriting based on debt service coverage ratios is on the rise. The loans differ from GSE-eligible mortgages in that underwriting is based on income generated by the property rather than looking to the borrower’s DTI ratio.

Lenders can’t keep up with the demand for non-QMs from investors in the secondary market. Originations are expected to grow when the agency refi wave crashes.

Rocket’s $968.4 million jumbo MBS is one of the largest from a nonbank post 2010. And after years of contributing non-QMs to MBS issued by others, AmWest is going to issue its own deal.

CoreVest issued a securitization involving bridge loans for residential properties; a prime non-agency MBS issued by JPMorgan Chase in 2018 is on watch for a downgrade.

MISMO and SFA are leading separate efforts to update and modernize the dataset used by various non-agency MBS participants.

A rise in interest rates near the end of March helped lift ARM originations in the second quarter. Still, the product’s market share remained well below pre-pandemic levels. (Includes data chart.)

For investors willing to shift from the agency MBS market into non-agency deals, the flow of GSE-eligible mortgages in non-agency MBS looks like a good proposition. Lenders, meanwhile, are taking a hit on pricing.

Among a group of 15 servicers tracked by this publication, nonprime servicing balances were essentially unchanged between March and June. At the servicer level, there were some fluctuations. (Includes data chart.)

Chase issued another prime non-agency MBS with a balance topping $1.0 billion. The firm also issued an investment-property deal while Lone Star offered an expanded-credit MBS.

Point has received more than $1.0 billion in new capital commitments while HomeLight received $363 million in new funding.