Market turns to non-QM for better margins

Annaly’s new conduit is acquiring non-QMs along with GSE-eligible mortgages for investment properties. Previously, the REIT’s main avenue for acquisitions was through bulk purchases.

Angelo Gordon Mortgage Investment Trust expects returns as high as 18% from securitizing non-QMs. The REIT and others are working to increase their acquisitions of the loans.

The three servicers added significant volume to their portfolios thanks to the surge in non-agency MBS issuance during the second quarter of 2021. The performance of securitized loans also continues to improve. (Includes data chart.)

The offerings in the non-agency MBS market range from deals backed by prime jumbo mortgages to investment-property loans that were eligible for sale to the GSEs to non-QMs.

Angel Oak’s REIT sees income decline; Zillow and LendingHome issue securitizations; non-agency forbearance level; Pretium adds director from Goldman Sachs.

The lender’s investment-property mortgage product offers a single rate to any borrower who qualifies based on income generated by the property.

Chase was the most active player in the non-agency MBS market in late July, with deals involving jumbos, investment-property mortgages and a risk-sharing transaction.

More than a year after volatility from the coronavirus disrupted operations for many non-QM lenders, new products are being launched and underwriting standards are being relaxed.

With lending volumes expected to increase, numerous non-QM lenders are working to add employees. New products are also being offered.