A lack of standardized reporting is causing problems for non-agency MBS investors. In one non-QM MBS, research firm dv01 found 233 loans that had been modified while the trustee reported only 41 mods.

After increasing in March, April and May, the delinquency rate on securitized non-QMs declined in June. Now servicers are grappling with forbearance plans that are expiring.

MFA and Western Asset Management took losses on non-QMs in 2Q. Anworth is in a holding pattern and Starwood is buying non-QMs at a discount.

An affiliate of Bayview Asset Management entered the prime non-agency MBS market and non-QM MBS issuers continue to stock deals with seasoned loans.

Share of non-agency mortgages in forbearance down slightly; Impac takes a loss in 2Q.

Demand for non-QMs in the secondary market is helping lenders loosen underwriting standards and drive down interest rates for new production. Five non-QM MBS hit the market in the past two weeks.

Production of higher-priced conventional mortgages increased in 2019, though the loans still have a relatively low market share. The top lender was a firm that focuses on loans for manufactured housing. (Includes two data charts.)

Delinquencies and loan modifications on non-agency mortgages increased in May, but at a slower rate than the sharp increase in April. Delinquencies are much higher on non-QMs than jumbos.

Lenders in the non-QM sector are working to get back to the way things were before the coronavirus. Sprout has resumed correspondent lending while a number of lenders have loosened underwriting standards.

Wells Fargo is maintaining its steady issuance of prime non-agency MBS while a pending deal from Neuberger Berman is much larger than the expanded-credit MBS the firm issued in May.