Non-QM lenders and MBS issuers are making adjustments amid a volatile secondary market. Issues include timing for MBS issuance and competition for new production.

The REIT stopped acquiring non-QMs during the fourth quarter as interest rates fluctuated and demand in the secondary market waned.

MISMO is working to update data fields established by the American Securitization Forum in 2009 for use in the non-agency MBS market.

At the end of 2022, Redwood had more capital dedicated to its business-purpose lending efforts than to aggregation of jumbo mortgages. Officials at the REIT expect the business-purpose segment to flourish even if there’s a recession.

Rising interest rates prompted a loss of $231.6 million at MFA Financial in 2022. The losses slowed in the fourth quarter, at “only” $6.7 million, helped by business-purpose lending operations.

Two new issuers are offering expanded-credit MBS, there’s a securitization backed by newly-originated second liens and the jumbo MBS market is showing more signs of life.

The grid is used by third-party due diligence providers when assessing loans in non-agency MBS for compliance with the TILA-RESPA Integrated Disclosure rule.

The performance of expanded-credit MBS was attractive to investors until interest rates increased throughout 2022. Higher rates cut into excess interest and slowed build-up of credit enhancement levels on outstanding deals.

Issuance of prime non-agency MBS nearly ground to a halt during the fourth quarter. For the full year, activity was down almost 60%. (Includes three data charts.)

Angel Oak Mortgage is among the nonbanks trying to sell off somewhat seasoned non-QMs that have interest rates well below prevailing rates.