Investors that are active in the market for non-QMs can’t seem to get enough of the loans or MBS. Meanwhile, large firms continue to avoid the sector due to concerns about liabilities and the lack of uniformity.

Redwood’s mortgage aggregation activity is increasing as banks apparently can’t handle all of the new volume tied to a decline in interest rates.

MFA Financial sharply boosted its acquisitions of non-QMs in the fourth quarter. It has investments in five lenders and plans to issue MBS.

Certain non-QM lenders’ underwriting tactics might not meet the CFPB’s ability-to-repay rule, according to Moody’s. It suggested tighter standards for bank statement mortgages and loans to the self-employed.

Annaly Capital Management and Ellington Financial are both generating double-digit returns from aggregating mortgages and issuing non-agency MBS. The firms plan to increase their activity in the sector.

Issuance of non-agency MBS backed by prime mortgages offers better returns than aggregating non-QMs, according to officials at Chimera Investment.

Presale reports for 13 non-agency MBS were published in the past two weeks as issuers sought to get deals into the market ahead of the Structured Finance Association’s annual conference.

SEC to meet MBS issuers; HPS acquires Citadel; Anworth plans non-QM MBS; Quontic streamlines non-QM refis; Ocwen takes a loss on servicing for New Residential.

United Wholesale Mortgage was the top originator of prime mortgages securitized in non-agency MBS in 2019. Underwriting characteristics for the sector loosened modestly.