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.)

Angel Oak Mortgage is among the nonbanks trying to sell off somewhat seasoned non-QMs that have interest rates well below prevailing rates.

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.

Redwood suggested Wells Fargo's exit from the correspondent channel won't boost the REIT's fortunes in the near term.

Most of the non-agency MBS on offer within the past two weeks was stocked with mortgages for investment properties.

Changes are under consideration for determining which firms qualify as community development financial institutions. Under a current proposal, CDFIs would have to follow the CFPB’s ability-to-repay underwriting requirements.

Six expanded-credit MBS started marketing within the past two weeks and there are also offerings of prime jumbos, HELOCs and even a credit-risk transfer deal from Santander Bank.

Non-agency MBS issuance perked up in early January as investor demand improved. Redwood Trust offered a jumbo MBS after a year-long lull in issuance and expanded-credit MBS issuers priced deals at tightening spreads.