According to data from state regulators, the largest nonbanks in the mortgage space have approximately four times as much debt as equity.

Since 2006, only one rated whole business securitization has defaulted. Investors in the deals are protected by various features, including a model that isn't particularly reliant on issuer profits.

In a recent report, Fitch Ratings noted that shortfalls can occur when a mortgage is prepaid before the end of the month, causing only a partial collection of the interest owed by the borrower...

Shea Pallante, executive vice president of Sprout Mortgage, called the non-QM market a “sleeping giant.”

Investors in some prime non-agency MBS are taking losses even though loans in the deals are performing well. The red ink is tied to variable servicing fees and high prepayment rates.

The non-QM market has seen strong growth since it started in 2014 though the sector still accounts for less than 5% of total residential originations.

Provident Funding is set to issue a non-agency MBS with standard mortgages eligible for sale to the GSEs. An affiliate of Cerberus is also planning a relatively large deal backed by seasoned mortgages.

The first non-QM MBS from Credit Suisse's DLJ Mortgage Capital relied solely on loans from AmWest Funding. The new security from DLJ is backed by product from multiple lenders.

What does it all mean? Shouldn’t rates be higher or is the DJIA headed for a market-cleansing correction? The financial tea leaves continue to throw off mixed signals. In other words, it’s all a crap shoot...

UWM doesn’t issue its own MBS, and instead contributes to deals issued by others, most notably, JPMorgan Chase.