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.

Impac’s CashCall unit will provide leads on non-QMs to mortgage brokers. The lender is also closing its third-party originations unit.

The REIT stopped acquiring non-QMs during the fourth quarter as interest rates fluctuated and demand in the secondary market waned.

MISMO is working to update data fields established by the American Securitization Forum in 2009 for use in the non-agency MBS market.

Non-agency MBS issuance update; PennyMac launches jumbo product; Fitch affirms A&D’s servicer rating, Redwood increases staff.

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.

Two new issuers are offering expanded-credit MBS, there’s a securitization backed by newly-originated second liens and the jumbo MBS market is showing more signs of life.

The performance of expanded-credit MBS was attractive to investors until interest rates increased throughout 2022. Higher rates cut into excess interest and slowed build-up of credit enhancement levels on outstanding deals.