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.)
Redwood Trust scaled back its jumbo business in 2022 and doesn’t have plans for a significant expansion any time soon, even with Wells Fargo’s exit from the correspondent channel.
Rising interest rates and financial volatility battered the non-QM market in 2022. This year almost has to be better by default, according to industry participants.
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