The offerings in the non-agency MBS market range from deals backed by prime jumbo mortgages to investment-property loans that were eligible for sale to the GSEs to non-QMs.

Flagstar Bank shot to the top of the list of originators of expanded-credit mortgages securitized in the second quarter of 2021, with two non-agency MBS stocked with GSE-eligible loans for investment properties. (Includes three data charts.)

The lender’s investment-property mortgage product offers a single rate to any borrower who qualifies based on income generated by the property.

Chase was the most active player in the non-agency MBS market in late July, with deals involving jumbos, investment-property mortgages and a risk-sharing transaction.

More than a year after volatility from the coronavirus disrupted operations for many non-QM lenders, new products are being launched and underwriting standards are being relaxed.

Non-agency forbearance increases; Sachem inks $200 million repo line; review of risk-retention requirements extended; Angel Oak plans to expand its digital capabilities; Liquid Mortgage receives patent; Home Diversification Corp. for sale.

With lending volumes expected to increase, numerous non-QM lenders are working to add employees. New products are also being offered.

The "patch" that provided QM status to every mortgage eligible for sale to the GSEs is no longer in effect. With fewer incentives to originate mortgages that comply with GSE standards, lenders could boost non-agency originations.

Toorak Capital Partners expanded its securitization activities into 30-year mortgages for investment properties. Bayview Asset Management and Goldman Sachs have jumbo MBS in the market, and a number of other issuers are planning deals.

The impairment rate on securitized non-QMs fell to 7.9% at the end of May. Prepayments in the sector remain elevated as borrowers refinance.