After more than a year of steady declines in delinquencies on securitized non-QMs, delinquency rates have fluctuated in recent months.

Non-agency MBS issuance nearly frozen; Redwood raises funds with debt sale; DBRS accepts more firms for due diligence.

Participants in the non-agency market note that the loans are more difficult to underwrite than typical agency mortgages. But given that agency refi business is falling, there’s still plenty of business to be had in the non-agency space.

ARMs are getting more popular with borrowers as interest rates increase. In the non-agency market, ARM originations are currently dominated by banks.

Non-agency originations of higher-priced mortgages increased by nearly 60% on an annual basis in 2021. The top lenders include a mix of expanded-credit producers and lenders that focus on manufactured homes. (Includes two data charts.)

Originations of expanded-credit mortgages helped to boost nonprime servicing portfolios in the first quarter of 2022. (Includes data chart.)

Homeowners have plenty of equity and nonbank lenders are looking to replace refinance business, leading some large nonbanks to start offering HELOCs. One complication: what to do with the assets.

Impac increased its emphasis on non-QM lending in the first quarter of 2022 and ended up taking a loss. Officials at the nonbank said hedging and other activities couldn’t overcome volatility in the non-QM market.

Altisource setting up alternative lending operations; Reverse Mortgage Funding offers non-agency MBS with proprietary reverse mortgages; Dovenmuehle assessed as “above average” by Moody’s.

A handful of real estate investment trusts acquired non-QMs at a discount as interest rates increased during the first quarter. Lenders selling the loans took some losses but appear to have weathered the storm.