The upfront fees the GSEs charge for conforming jumbos and mortgages for second homes are set to increase. Some volume in those products will likely flow into the non-agency market.
Mortgages in the transaction were acquired by Western Alliance Bank on a correspondent basis and will remain on its balance sheet. Risk-sharing deals in the non-agency market are rare and largely involve megabanks.
Prospects for non-agency MBS issuance in 2022 look mixed, with expanded-credit activity expected to increase while volume involving non-agency jumbos and GSE-eligible loans could decline.
Western Asset Mortgage Capital plans to shed investments in commercial mortgages and shift to residential assets, including non-QMs. The REIT was taking losses on commercial investments.
Officials at Velocity said the acquisition of an FHA multifamily lender will help to expand the company’s product offerings and serve as a hedge for its traditional focus on business-purpose lending.
In a familiar refrain, participants in the non-QM market suggest the sector is ready for takeoff. Still, technology in the non-QM market lags compared with the GSEs.
ARM lending ticked up during the third quarter though the ARM share of total originations remains well below the level seen in 2019. (Includes data chart.)
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