Dwindling refis and record levels of home equity are making home-equity products attractive for nonbanks. The challenge is competing with banks that have the capacity to hold HELOCs and the like in portfolio.
Radian is following Arch among private mortgage insurers launching non-agency conduits. Officials at Radian note that its experience with private MI will help with acquisitions and sales of non-agency mortgages.
Western Asset Management Company considering a sale of its non-agency REIT; Velocity offers another small-balance commercial MBS; PennyMac ramping up jumbo originations.
The Federal Reserve giveth and taketh away in the agency MBS market. And now that the central bank’s investment activity is significantly curtailed, investors are seeing some opportunities in the sector.
Two prominent non-QM lenders failed in recent months amid volatility in the market. Non-agency aggregators suggest that the issues were lender-specific and the market is improving.
With limited demand for refinancing, lenders are peddling other products. While nonbanks are offering home-equity loans, some lenders are selling mortgages with a reduced-fee refi option down the road.
The REIT’s investments in MSRs increased by 20.2% in the second quarter, based on unpaid principal balance, to $109.0 billion as of the end of June. Annaly sees the assets as a nice hedge to its traditional investments in agency MBS.