Redwood’s jumbo acquisition volume declined by more than 40% in the second quarter and the REIT took a loss on its residential activities. Officials at Redwood said the company is well-positioned moving forward.

Annaly is seeing strong returns from its aggregation and sales of non-agency mortgages even with weak demand in the secondary market. The REIT boosted its non-agency MBS issuance with plans for further growth.

MFA Financial took another loss in the second quarter as its holdings of non-QMs lost value and MBS with the loans was met with weak demand. The nonbank’s business-purpose lending unit also took a loss.

After a nearly 30-day lull, MBS with prime jumbos hit the market. An offering from Chase was significantly smaller than the issuance from the firm in the past. A number of expanded-credit MBS are also on offer.

Dwindling refis and record levels of home equity are making home-equity products attractive for nonbanks. The challenge is competing with banks that have the capacity to hold HELOCs and the like in portfolio.

Radian is following Arch among private mortgage insurers launching non-agency conduits. Officials at Radian note that its experience with private MI will help with acquisitions and sales of non-agency mortgages.

Western Asset Management Company considering a sale of its non-agency REIT; Velocity offers another small-balance commercial MBS; PennyMac ramping up jumbo originations.

Issuance of prime non-agency MBS fell sharply in the second quarter of 2022 as rising interest rates limited investor demand for the securities. Nonbanks remained the main source of prime mortgages. (Includes three data charts.)

Non-agency lenders looking to sell mortgages with lower interest rates only have whole-loan sales as an outlet as MBS investors wait for new originations.

Sprout originated about half of the loans in a new $293.5 million expanded-credit MBS from an affiliate of Lone Star Funds. Fitch Ratings assessed the deal and suggested that risks tied to Sprout were limited.