Citadel posted record origination volume for the company in the second quarter, with help from products beyond the typical non-qualified mortgage offerings. Citadel also stands out by servicing its originations and largely avoiding contributing to non-agency MBS.

A number of correspondent aggregators at a recent conference provided tips on how to convince loan originators to offer non-QMs.

Issuance of expanded-credit MBS is set for a strong start in the third quarter. Presale reports for eight deals were published in the past two weeks, including the second-largest post-crisis issuance.

Average credit scores, DTI ratios and LTV ratios are staying relatively steady as expanded-credit MBS issuance booms. Lenders are putting more emphasis on underwriting based on alternative documentation.

The rating service will continue to take a relatively harsh view of mortgages underwritten with alternative documentation even though they have per-formed better than expected.

A new wholesale lender is focusing on originating non-QMs for affluent borrowers. Its founders include subprime alum and tech geeks.

Issuance of expanded-credit MBS slowed somewhat in the second quarter but volume through the first half of the year more than doubled that seen in the first half of 2018. The sector remains hotter than the prime non-agency MBS market.

A variety of lenders loosened underwriting standards for non-QMs. Also, several new players have entered the market.