Mortgages in the transaction were acquired by Western Alliance Bank on a correspondent basis and will remain on its balance sheet. Risk-sharing deals in the non-agency market are rare and largely involve megabanks.

Prospects for non-agency MBS issuance in 2022 look mixed, with expanded-credit activity expected to increase while volume involving non-agency jumbos and GSE-eligible loans could decline.

Western Asset Mortgage Capital plans to shed investments in commercial mortgages and shift to residential assets, including non-QMs. The REIT was taking losses on commercial investments.

Officials at Velocity said the acquisition of an FHA multifamily lender will help to expand the company’s product offerings and serve as a hedge for its traditional focus on business-purpose lending.

In a familiar refrain, participants in the non-QM market suggest the sector is ready for takeoff. Still, technology in the non-QM market lags compared with the GSEs.

Some non-agency lenders are widening the credit box to uncomfortable levels, prompting discussion at the ABS East conference this week.

ARM lending ticked up during the third quarter though the ARM share of total originations remains well below the level seen in 2019. (Includes data chart.)

With GSE loan limits in high-cost areas nearing $1 million in 2022, Redwood Trust called on the FHFA to use its powers to place limits on the GSEs’ acquisitions of high-balance mortgages.

QM revisions not on CFPB’s agenda; regulators leave risk-retention standards as is; forbearance on non-agency loans increase; non-agency MBS issuance update; Deephaven allowing remote appraisals for non-QMs.

Expanded-credit mortgages gained market share as total first-lien originations declined in the third quarter. Still, the sector accounted for only 1.1% of the total origination pie. (Includes data chart.)