Redwood’s mortgage aggregation activity is increasing as banks apparently can’t handle all of the new volume tied to a decline in interest rates.

MFA Financial sharply boosted its acquisitions of non-QMs in the fourth quarter. It has investments in five lenders and plans to issue MBS.

OptionWide is a relatively new non-QM lender while DoubleLine has close to $150 billion in assets under management.

CFPB Director Kathy Kraninger says the relatively small size of the non-qualified-mortgage market is one of the reasons the bureau plans to change QM standards.

Congress is unlikely to increase the g-fee charged by the GSEs, though the FHFA may as part of efforts to “level the playing field” between the GSEs and the non-agency market.

Certain non-QM lenders’ underwriting tactics might not meet the CFPB’s ability-to-repay rule, according to Moody’s. It suggested tighter standards for bank statement mortgages and loans to the self-employed.

Annaly Capital Management and Ellington Financial are both generating double-digit returns from aggregating mortgages and issuing non-agency MBS. The firms plan to increase their activity in the sector.

Issuance of non-agency MBS backed by prime mortgages offers better returns than aggregating non-QMs, according to officials at Chimera Investment.

Presale reports for 13 non-agency MBS were published in the past two weeks as issuers sought to get deals into the market ahead of the Structured Finance Association’s annual conference.