Non-agency forbearance declines; Pacific Western Bank acquires Civic Financial Services; Velocity inks new financing; Angel Oak Commercial Lending set for growth.

The non-QM market is poised for a comeback, helped by strong demand from investors in the secondary market. However, production is lagging as lenders continue to focus on agency refis.

First Republic Bank reported increased production in the fourth quarter and for full year. Volume was down on an annual basis at Flagstar Bank and Redwood Trust.

It’s taking longer to originate non-qualified mortgages and offload the product due to capacity constraints at due diligence providers and other third-party vendors.

A significant portion of non-QMs could meet new standards for qualified mortgages, according to Kroll Bond Rating Agency. It’s also possible that the CFPB will alter the standards before they take effect.

The latest changes made to the GSEs’ preferred stock purchase agreement place limits on certain loan acquisitions by Fannie and Freddie. However, the move is unlikely to help the non-agency market.

Strong application volume for non-QMs at PCMA; increased funding for investment-property mortgages; CFPB exempts smaller depository institutions from escrow requirements for higher-priced mortgages.

The REIT set a company record for locked jumbo business in the third quarter and then went on to break it in the fourth quarter. Redwood is focusing on prime jumbos as its expanded-credit lending has stalled.

The fintech upstart aims to issue a jumbo MBS during the first quarter of 2021 using blockchain technology. Mike Cagney’s shop also has applied for a bank charter.

Non-agency lenders will no longer have to look to stringent underwriting requirements set by the CFPB, which will likely shift some non-QM lending in-to the QM sector.