Loan originators hurting for business as GSE refis decline should consider non-QMs, according to industry participants. Some major lenders are expecting non-agency lending to jump this year.

It should be a banner year for mergers and acquisitions in the residential finance space. Already, two deals have been announced, with more likely to follow.

loanDepot’s founder is busy buying luxury homes these days. In a few weeks we’ll know how well the company did in the fourth quarter. Meanwhile, non-agency MBS production remains brisk.

What will separate the men from the boys and the women from the girls in 2022? Purchase-lending and non-QMs. At least that’s what some executives we spoke to believe.

Non-agency jumbo lending has been booming in 2021, but the $647,200 question is how big an impact new agency loan limits will have on the market. (Includes three data charts.)

Some non-agency lenders are sticking with the older QM standards due to concerns about liability tied to income and employment verification requirements under the newer, more lenient QM standards.

A tougher origination year in 2022? Looks that way, but forecasts can change on a dime when unexpected news alters economic perceptions. Meanwhile, a fist full of nonbank stocks are selling for less than $5 a unit.

Non-QMs offer the promise of strong margins and a product to replace refinance volume. They also account for a miniscule portion of mortgage originations.

We pointed it out before, but the situation has not changed: Nonbanks that went public over the past 16 months are not doing well when it comes to share price. As for meaning: Such a performance does not bode well for other nonbanks contemplating life in the public realm.

There is still plenty of business to be done in the agency market, but jumbo and ECM lending were the sectors that saw growth from the second to the third quarter. (Includes two data charts.)