Newfi is offering a non-QM where the interest rate incrementally steps up annually for five years then remains fixed. Meanwhile, Milo launched a cash-out crypto mortgage, where borrowers pledge cryptocurrency in exchange for a loan as large as $5.0 million.

The expanded-credit mortgage sector bucked the trend and increased production in the second quarter. While some lenders significantly boosted originations, others recorded sharp declines. (Includes data chart.)

Less-capitalized non-QM lenders struggled amid weak demand for the loans in the secondary market. Some firms are looking to take advantage of that weakness.

Non-QM lenders are regaining their footing as volatility in the secondary market recedes. And many potential non-QM borrowers are comfortable paying relatively high interest rates, helping to boost originations.

Impairments, which reflect delinquencies and modifications, increased on securitized non-QMs for a second consecutive month. In July, the performance of severely distressed borrowers also worsened.

The non-agency market hasn’t lived up to the hype, according to Mat Ishbia of United Wholesale Mortgage, which saw a drop in non-agency lending. The overall sector, meanwhile, saw higher production and gained market share in the second quarter.

Non-agency business-purpose lending is paying off for Velocity Financial. The firm turned a profit in the second quarter despite a decline in originations.

Angel Oak Mortgage suffered widening losses in the second quarter amid weak demand in the secondary market for non-QMs. Still, officials at the REIT suggest that things are looking up.

Altisource Asset Management is acquiring bridge loans and plans to add non-agency debt service coverage ratio mortgages to its mix as it transitions from asset management to an originator of non-agency loans.

For the first time since May, a non-agency MBS with GSE-eligible mortgages for investment properties hit the market. And Change Lending switched products with its latest offering, focusing on mortgages with income verification. Overall, issuance remains slow.