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Inside Nonconforming Markets

June 10, 2022

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Retail Channel Holds Up as Jumbo Lending Takes Hit

No channel was immune to the downturn in jumbo originations in the first quarter of 2022, but the retail channel suffered the least. There were also wide variations at the lender level in originations trends. (Includes data chart.) Read More

CDFIs Under Scrutiny as their Non-QM Lending Increases

Kroll Bond Rating Agency published a report focusing on mortgages originated by CDFIs and their inclusion in non-agency MBS. The Change Company defended its practices while Quontic Bank stopped offering “no ratio” loans. Read More

ARM Originations Decline in 1Q22, Market Share Increases

Originations of adjustable-rate mortgages declined in the first quarter of 2022, but at a slower rate than the downturn in total first-lien production. ARMs accounted for 7.9% of total originations during the quarter. (Includes data chart.) Read More

Weak Demand for Non-QMs Persists Following Rise in Rates

Spreads on expanded-credit MBS issuance have widened significantly this year as lenders sell mortgages originated prior to the runup in interest rates. Issuance has slowed but market participants are optimistic in the long term. Read More

Lenders Defend Offering DSCR Loans with Negative Cash Flow

Some non-agency lenders will allow for investment-property mortgages underwritten based on the income generated by the property where the monthly rent doesn’t cover expenses for the property. Read More

Bayview Resumes Small-Balance Commercial MBS Issuance

An affiliate of Bayview Asset Management issued an MBS with small-balance commercial properties in May, marking the first issuance of its type from the firm since September 2020. Read More

Delinquencies on Non-QMs Tick Up in April

After more than a year of steady declines in delinquencies on securitized non-QMs, delinquency rates have fluctuated in recent months. Read More

News Briefs

Non-agency MBS issuance nearly frozen; Redwood raises funds with debt sale; DBRS accepts more firms for due diligence. Read More

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As homeowner equity continues to build, more and more lenders are launching home equity lending products. Are you thinking of joining this market?

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