The market for non-qualified mortgages is getting more crowded, with new lenders entering the space and other lenders adding to their programs or enhancing their offerings.

Originations of adjustable-rate mortgages declined 11.6% in 2018, driven by sharp decreases at a number of banks that dominate ARM production. The sector also lost some market share during the year.

Interest-only mortgage originations in 2018 declined 12.1% among a group of top-ranked lenders. The decline was slightly greater than the drop in total first-lien originations.

After years of acquiring mortgages as whole loans, PIMCO and MetLife are set to issue separate non-agency MBS stocked with seasoned mortgages. An affiliate of PIMCO plans a $382.56 million issuance while MetLife's deal could be double that size.

Citadel Servicing and Angel Oak Companies reported a sharp increase in origination of nonprime mortgages for the first quarter. Demand from borrowers for non-qualified mortgages remains strong.

Issuance of prime non-agency mortgage-backed securities slowed in the first quarter of 2019, prompting industry analysts to reduce their volume projections for the full year. 

Issuance of expanded-credit mortgage-backed securities hit $5.97 billion in the first quarter of 2019, a record for the sector. It also topped prime non-agency MBS volume for the third consecutive quarter.