Anne Canfield of Michael Best Strategies: “This is a major issue. I can honestly tell you that nonbank mortgage servicers will not make it past early May. They will be out of business”…
Issuance of non-agency MBS fell 8.2% in the first quarter, with the decline driven by the expanded-credit sector. The non-agency MBS market essentially shut down in March due to fallout from the coronavirus. (Includes data chart.)
The top five producers of jumbos continue to offer the mortgages. The production picture is less clear at nonbanks, which don’t have portfolio capacity.
New Residential, Redwood and Two Harbors sold non-agency MBS holdings as REITs were hit with a surge of margin calls from their lenders. Efforts by the federal government to prop up the mortgage market haven’t done much for non-agency players.
Originations of both ARMs and IOs increased in the fourth quarter and in all of 2019. Growth among IO lenders even outpaced the increase in total first-lien originations. (Includes two data charts.)