While delinquencies on non-QMs spiked in the early days of the pandemic, many of those borrowers returned to making payments or cured their debt without the loan holders suffering large losses.

Aggregation of non-agency mortgages isn’t generating the types of returns seen in 2021, but it’s still a good business, according to officials at MFA Financial.

AG Mortgage Investment Trust acquired $2.5 billion of non-agency loans last year, about half of them during the fourth quarter. The REIT is targeting returns of around 15% from non-agency MBS issuance.

Western Asset Mortgage Capital took a third consecutive loss during the October-December period as it works to shift its investment focus to non-QMs and other non-agency products.

Goldman Sachs is set to issue its first expanded-credit MBS, with four other firms also offering deals in the past two weeks. In the prime non-agency space, JPMorgan Chase has another large offering.

Champions Funding enters the wholesale market for non-QMs; Angel Oak Mortgage Solutions expands the types of properties eligible for its investor cashflow program; LendingOne is offering a new single-family rental product; DBRS approves MetaSource as due diligence provider.

Spreads on non-agency MBS issued early this year were wider than the pricing seen near the end of 2021. Industry participants witnessed volatility in the broader financial markets along with an increase in the supply of non-agency MBS.

Issuance of non-agency MBS with deals backed by mortgages bought out from Ginnie Mae MBS has increased in recent months. Once they’re reperforming, those loans can be re-delivered to Ginnie.

On the horizon: a possible regulatory turf war...

The changes to the criteria were significant enough to prompt Moody’s to place five warehouse securitizations on review for possible downgrade...