The use of automated valuation models is set to increase, prompting concerns and some optimism among industry participants. The Dodd-Frank Act directed federal regulators to address the use of AVMs but that hasn't happened yet.

First Republic’s IO holdings had a weighted average loan-to-value ratio of roughly 56%, based on appraised value at the time of origination. The loans have credit scores averaging 762.

Nearly all of the loans in the $264.46 million issuance were originated by Finance of America Mortgage and Finance of America Commercial.

“The importance in having a well-functioning, transparent and liquid non-QM market is arguably growing by the day,” according to analysts at Keefe, Bruyette & Woods.

Mortgages in the newer deal have seasoned for an average of three months while loans in the other MBS are roughly 15 months old.

The $377.47 million deal from Waterfall Asset Management marks the second non-agency MBS backed by proprietary reverse mortgages to receive a credit rating since 2007.

Issuance of MBS backed by fix-and-flip loans is outpacing that of last year, though the market remains small. The largest issuer in the space received a significant investment from KKR.

Varde agreed to sell non-QM lender Deephaven to Pretium, an investment manager involved in single-family rentals along with mortgage credit. Transaction details weren't disclosed.

Bank of America overtook Chase and Wells Fargo as the top originator of adjustable-rate mortgages in the first quarter of 2019. The ARM share of total originations also increased slightly.