Improvements to practices in the non-agency MBS market will help to protect investors from lenders that don’t make it through the current market contraction, according to Kroll Bond Rating Agency.

Kroll Bond Rating Agency published a report focusing on mortgages originated by CDFIs and their inclusion in non-agency MBS. The Change Company defended its practices while Quontic Bank stopped offering “no ratio” loans.

After more than a year of steady declines in delinquencies on securitized non-QMs, delinquency rates have fluctuated in recent months.

A look at the performance of investment-property loans reveals some differences between GSE-eligible loans and non-agency mortgages. Performance also differed from owner-occupied prime jumbos and non-QMs.

Fitch’s review of 225 non-agency MBS prompts downgrade of a single tranche; Unison issues securitization with residential equity agreements; Carrington offers to complete certain non-QM origination tasks for brokers.

Select Portfolio Servicing added nearly twice as much servicing from just-issued non-agency MBS in the fourth quarter as it did in the third. Shellpoint remains the largest servicer of recently issued non-agency MBS. (Includes data chart.)

The amount of nonprime servicing handled by a group of 15 firms was essentially flat between the end of June and the end of September. Three of the top five firms in the sector saw their portfolios shrink. (Includes data chart.)

UWM is offering its first non-QM product in years; the impairment rate on securitized non-QMs declined somewhat in October.

Shellpoint was named as servicer on $7.31 billion of non-agency MBS issued during the third quarter. Cenlar, a major subservicer in the sector, is under a consent order with the OCC. (Includes data chart.)

The share of securitized non-QMs that are delinquent or modified increased in August for the first time since February. Still, industry analysts are comfortable with the long-term outlook for performance.