Originations of non-QMs tend to be more heavily weighted toward purchase mortgages than the broader mortgage origination market. Lenders are working to advise loan originators on the unique product offerings in the sector.

The non-agency residential lending unit and business purpose lending arm are projected to earn returns greater than 20% this year. Still, Redwood took a large loss in 2020 due to volatility from the coronavirus.

Sterling Bank and Trust reached a settlement over faulty disclosures on the bank’s now shuttered non-QM program. The bank has upped reserves for further potential losses stemming from repurchases and loan sales.

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.