A reduction in GSE refi business along with regulatory changes are expected to prompt an increase in originations of non-agency mortgages. The bulk of the increase could come from prime loans.

Securitization of mortgages for investment properties increased at Fannie and Freddie in the first quarter even as overall GSE business declined. Lenders appear to have rushed to deliver the loans before new restrictions took effect. (Includes data chart.)

A number of firms are working to increase originations of non-QMs and ramping up investments in the loans. It can be a highly profitable business, though investor demand is volatile.

As an increase in interest rates curtailed its GSE refi volume, Impac is rushing to ramp up originations of non-QMs. The firm also plans to issue its own MBS.

A flurry of non-agency MBS hit the market; the number of non-agency mortgages in forbearance increases; SFA raises concerns about CFPB’s proposal to establish a partial foreclosure moratorium; SFA to set up data tape task force; Sachem Capital generates $2.2 million of net income in 1Q21; new industry hires.

Near the end of April, Chase and Redwood were marketing large jumbo MBS. Also, Citi returned to the sector for the first time since 2014.

Redwood Trust nearly doubled its net income in the first quarter, helped by the quick aggregation and sale of jumbo mortgages.

Goldman Sachs Mortgage Company has acquired more than $800 million of non-QMs this year and is set to issue a $291 million MBS.

Guaranteed Rate jumped to the top spot in the first quarter of 2021 among lenders contributing to prime non-agency MBS. MAXEX Clearing also sharply increased its contributions. (Includes two data charts.)

Prime non-agency MBS issuance continued to flow in April, helped by some new players. Expanded-credit activity has been limited recently, with a downturn in demand.