MFA was one day away from pricing its first non-QM MBS in March when volatility from the coronavirus struck. Result: deal scuttled but there's a happy ending: the REIT finally issued its first non-QM MBS this week.

Happy with its returns from non-QM lending and MBS issuance from its investment in LendSure, Ellington Financial may invest in other originators.

The ARM and IO share of loans in expanded-credit MBS increased in the second quarter. The volume of loans produced through the correspondent channel and for investor properties declined. (Includes three data charts.)

Only two non-agency MBS hit the market in the past two weeks: a non-QM deal from PIMCO and a deal from Starwood Property.

Velocity, which focuses on loans for investment properties, is working on obtaining warehouse financing without mark-to-market provisions.

MFA and Western Asset Management took losses on non-QMs in 2Q. Anworth is in a holding pattern and Starwood is buying non-QMs at a discount.

An affiliate of Bayview Asset Management entered the prime non-agency MBS market and non-QM MBS issuers continue to stock deals with seasoned loans.

Demand for non-QMs in the secondary market is helping lenders loosen underwriting standards and drive down interest rates for new production. Five non-QM MBS hit the market in the past two weeks.

The lender increased its mortgage originations by 67% in the second quarter, with an emphasis on refinances.

Chase is set to issue a $750 million deal while Chimera is planning a $362 million MBS. Both securities are stocked with jumbos along with mortgages eligible for sale to the GSEs.