Non-agency MBS can generate returns in the mid-teens, according to some issuers. Also, a reduction of limitations placed on the GSEs isn’t expected to slow non-agency MBS issuance of GSE-eligible loans.

Originations of non-agency mortgages for residential investment properties increased by nearly 60% in the third quarter at Velocity. The lender also received a record amount of loan applications in October.

Shellpoint was named as servicer on $7.31 billion of non-agency MBS issued during the third quarter. Cenlar, a major subservicer in the sector, is under a consent order with the OCC. (Includes data chart.)

Chase and Rocket are offering separate non-agency MBS sized at more than $1.0 billion each and stocked with jumbo mortgages. There’s also plenty of GSE-eligible loans for investment properties in the market.

GSE-eligible mortgages for investment properties are reshaping the prime non-agency MBS market. The loans have somewhat looser underwriting standards than what’s typically seen on prime jumbos. (Includes three data charts.)

Many jumbo lenders are no longer looking to Appendix Q when originating loans. Instead, they have the option to underwrite loans using GSE automated underwriting systems and obtain QM status.

HEIs differ from reverse mortgages in that there’s no age limit and the borrower can still have a first mortgage. Separate HEI securitizations were recently issued involving Point and Unlock Technologies.

Securitizing loans originated by Genesis could generate returns of nearly 20% for New Residential. The acquisition is set to close later this year.

There’s plenty of non-agency MBS with GSE-eligible mortgages for investment properties, along with prime jumbo deals, expanded-credit mortgages and even some esoteric collateral.

The supply of mortgages for non-agency MBS is expected to decline, leading to concerns that industry participants might loosen underwriting standards to prop up volumes.