Strong home price appreciation helped push some GSE conforming jumbos into the non-agency market. Are loans for second homes next? (Includes data chart.)

The California-based mortgage lender has a new CEO and plans to increase its non-QM production and issue MBS.

Recent non-agency MBS include the year’s first expanded-credit MBS, plenty of prime deals and even a security with proprietary reverse mortgages.

The upfront fees the GSEs charge for conforming jumbos and mortgages for second homes are set to increase. Some volume in those products will likely flow into the non-agency market.

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.

Non-agency MBS issuers are off to a fast start this year, with four deals marketing this week. The MBS are backed by non-agency jumbos and GSE-eligible mortgages for investment properties.

New Residential set to issue single-family rental securitization; DBRS accepts Phoenix Collateral Advisors as due-diligence provider.

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.