Among the lenders currently offering non-QMs, underwriting standards are tighter and interest rates on the loans are higher than earlier in the year. Industry participants are optimistic that the sector will rebound, eventually.

Beginning in March, the GSEs loosened certain appraisal standards due to complications from the coronavirus. A number of non-agency lenders are following the GSEs’ lead.

Redwood reduces both debt and the share of its debt subject to potential margin calls; Sprout launches new jumbo product.

The jumbo market was humming along at the start of the year until volatility from the coronavirus disrupted lending in March. Originations of jumbos declined sharply and the sector lost market share. (Includes data chart.)

In areas where the GSEs are seen as competing with the non-agency market, business was good for the GSEs in the first quarter of 2020. (Includes data chart.)

Angel Oak is originating non-QMs again and a handful of other shops plan to re-enter as well. However, some lenders continue to hold off.

Redwood took a $943 million loss in the first quarter amid volatility from the coronavirus. The REIT laid off about 35% of its employees in April, among other adjustments.

Profit at Velocity Financial declined in the first quarter and half the staff was temporarily furloughed. Still, the firm plans to issue an MBS in the coming weeks and get back on track.

Lenders that focus on residential investment properties continue to originate loans, albeit with tighter standards and at higher interest rates.

SLS settles foreclosure issue; KBRA places non-agency MBS on watch for downgrades; Provenance blockchain platform facilities loan sales.