A recent ruling by a California appeals court tied to default interest charges by lenders and servicers could have national implications, according to industry attorneys.

Yes, expanded-credit mortgage originations fell sharply in the third quarter as nonbank lenders faced parched conditions in the MBS market. But ECM is the only mortgage sector where 2022 volume is running ahead of last year's pace. (Includes data chart.)

If lenders want to set themselves apart in an increasingly competitive purchase market, they will have to become experts in the non-QM space, according to officials at Deephaven Mortgage.

Nonprime servicing portfolios increased by 1.7% in the third quarter and 7.5% year-over-year. Only three of the top-10 players in the sector saw volumes decline from the second to the third quarter. (Includes data chart.

Issuance volume among some expanded-credit MBS contributors nearly doubled in the third quarter while others avoided the market. Issuers and lenders continue to face volatility in demand from MBS investors. (Includes three data charts.)

Demand for non-QMs in the secondary market remains weak. Investors are concerned about the prepayment profile of the loans, among other issues.

Annaly was the top issuer of non-agency MBS in the third quarter. The REIT had to retain more of its issuance than usual due to weak investor demand.

Non-QM impairment rate increases in September; Angel Oak launches ETF with focus on non-agency MBS investments; new correspondent lender focusing on non-QMs; Go Mortgage offers non-QM construction loan.

Debt service coverage ratio loans for investment properties are starting to look more risky as the Fed works to address inflation. Still, activity in the sector is increasing.

Sterling Bank and Trust paid $6 million to settle charges from the OCC regarding a now-shuttered non-QM program. Investigations by the DOJ and SEC are ongoing.