Underwriting based on debt service coverage ratios is on the rise. The loans differ from GSE-eligible mortgages in that underwriting is based on income generated by the property rather than looking to the borrower’s DTI ratio.
Lenders can’t keep up with the demand for non-QMs from investors in the secondary market. Originations are expected to grow when the agency refi wave crashes.
Rocket’s $968.4 million jumbo MBS is one of the largest from a nonbank post 2010. And after years of contributing non-QMs to MBS issued by others, AmWest is going to issue its own deal.
The expanded-credit sector is finally bouncing back from the disruptions faced for much of 2020. Originations in the second quarter of 2021 were close to pre-pandemic levels. (Includes data chart.)
Among a group of 15 servicers tracked by this publication, nonprime servicing balances were essentially unchanged between March and June. At the servicer level, there were some fluctuations. (Includes data chart.)
Chase issued another prime non-agency MBS with a balance topping $1.0 billion. The firm also issued an investment-property deal while Lone Star offered an expanded-credit MBS.
A new expanded-credit MBS from Angelo Gordon includes loans that won’t be subject to third-party reviews until after closing. Due diligence firms are swamped due to a boom in non-agency MBS issuance.
The REIT sources the bulk of its acquisitions of non-QMs from lending units affiliated with Angel Oak Companies, leaving more time for asset management and securitization activities.
In the past two weeks, $2.74 billion of non-agency MBS were gobbled up by investors. GSE-eligible mortgages for non-owner-occupied properties accounted for half of the dollar volume in the deals.
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