The expanded-credit mortgage sector bucked the trend and increased production in the second quarter. While some lenders significantly boosted originations, others recorded sharp declines. (Includes data chart.)
Less-capitalized non-QM lenders struggled amid weak demand for the loans in the secondary market. Some firms are looking to take advantage of that weakness.
Pricing increases that took effect in April reduced the volume of loans for second homes and conforming jumbos going to the GSEs. The “core” product share of GSE business also hit a high level in the second quarter. (Includes data chart.)
Non-QM lenders are regaining their footing as volatility in the secondary market recedes. And many potential non-QM borrowers are comfortable paying relatively high interest rates, helping to boost originations.
Impairments, which reflect delinquencies and modifications, increased on securitized non-QMs for a second consecutive month. In July, the performance of severely distressed borrowers also worsened.
Among the top 15 servicers of nonprime mortgages, portfolios increased slightly in the second quarter. Delinquencies, meanwhile, improved. (Includes data chart.)
The non-agency market hasn’t lived up to the hype, according to Mat Ishbia of United Wholesale Mortgage, which saw a drop in non-agency lending. The overall sector, meanwhile, saw higher production and gained market share in the second quarter.