Issuers of expanded-credit MBS stocked deals with $14.10 billion of volume in the first quarter of 2022, a record for the sector. A rise in interest rates helped to increase securitization activity. (Includes three data charts.)

Redwood’s profit took a hit in the first quarter, with non-agency mortgage aggregation and loan sales slowing amid a rise in interest rates. Still, officials at Redwood were happy with the REIT’s performance.

Annaly Capital Management is working to increase its aggregation of non-agency mortgages. The company generated returns in the mid-teens from the activity in the first quarter.

Some issuers of non-agency MBS are stocking deals with mortgages that have seasoned for an average of about one month while others are still offloading mortgages that were originated prior to the runup in interest rates.

Issuance of non-agency MBS ground to a halt near the end of March but gained some momentum this week, led by prime deals.

The conduit started acquiring mortgages in mid-2021, with a focus on a limited number of lenders and relatively conservative credit standards.

Higher interest rates took a bite out of Angel Oak Mortgage’s profits in the fourth quarter, but its non-QM originations continue to remain strong. The firm also plans to maintain regular issuance of MBS.

Velocity increased its income and originations from the third to the fourth quarter. The lender focuses on non-agency business-purpose loans.

Six expanded-credit MBS hit the market in the past two weeks, including the largest deal since COVID upended the sector. Activity is much slower in the space for prime jumbos and GSE-eligible investment-property loans.

Aggregation of non-agency mortgages isn’t generating the types of returns seen in 2021, but it’s still a good business, according to officials at MFA Financial.