Two securitizations brought to the market in May were stocked with recently originated non-qualified mortgages as issuers continue to plow their way through the remainder of the pandemic.

The top three servicers of non-agency MBS issued during the first quarter of 2021 handled nearly 70% of the market. Shellpoint, the top-ranked firm, alone had a 41% share.

Angel Oak Mortgage, which primarily invests in non-QMs originated by affiliates of Angel Oak Companies, plans to become a public company.

Securitization of mortgages for investment properties increased at Fannie and Freddie in the first quarter even as overall GSE business declined. Lenders appear to have rushed to deliver the loans before new restrictions took effect. (Includes data chart.)

A number of firms are working to increase originations of non-QMs and ramping up investments in the loans. It can be a highly profitable business, though investor demand is volatile.

As much as $20 billion of GSE-eligible mortgages could go into non-agency MBS annually due to new restrictions on GSE acquisitions of mortgages for investment properties and second homes.

It marks the first residential MBS rated by Kroll that aligns with a social bond framework. Fitch Ratings also rated the deal, though the firm appeared to be somewhat less impressed.

Months of improvements in the performance of non-agency MBS stalled earlier this year, though delinquencies resumed a downward trend at the end of March.

Some $470 million of expanded-credit mortgages originated by AmWest Funding were securitized in the first quarter. (Includes three data charts.)

Near the end of April, Chase and Redwood were marketing large jumbo MBS. Also, Citi returned to the sector for the first time since 2014.