Originations of non-QMs and other expanded-credit products increased in 2022 while total mortgage originations declined. Citi was the top expanded-credit producer during the year.
Rising interest rates and fickle demand in the secondary market made it difficult to originate non-QMs in 2022. The hope among industry participants is that volatility will recede.
Non-QM lenders and MBS issuers are making adjustments amid a volatile secondary market. Issues include timing for MBS issuance and competition for new production.
Among a group of 20 prominent nonprime servicers, portfolio balances increased by 0.3% during the fourth quarter of 2022. Prepayment rates on non-QMs are low and delinquencies are rising.
Rising interest rates prompted a loss of $231.6 million at MFA Financial in 2022. The losses slowed in the fourth quarter, at “only” $6.7 million, helped by business-purpose lending operations.