Non-agency MBS brought to the market in the past two weeks were primarily stocked with jumbo mortgages and GSE-eligible loans for investment properties. There were also a few expanded-credit deals.
MFA Financial posted a sharp increase in income, driven by its focus on buying non-agency mortgages and its acquisition of Lima One, a business-purpose lender.
AG Mortgage Investment Trust more than doubled its net income in the third quarter as it shifted its focus to non-agency mortgages. AGMIT is sourcing many of its mortgage acquisitions from an affiliated lender.
The public REIT portion of the Angel Oak Companies non-QM machine nearly tripled its income in the third quarter thanks to an increase in loan acquisitions and an MBS issuance.
The largest non-agency MBS on offer in the past two weeks was a $762 million deal from United Wholesale Mortgage. Barclays Capital is also set to issue an expanded-credit MBS.
Non-agency MBS can generate returns in the mid-teens, according to some issuers. Also, a reduction of limitations placed on the GSEs isn’t expected to slow non-agency MBS issuance of GSE-eligible loans.
Originations of non-agency mortgages for residential investment properties increased by nearly 60% in the third quarter at Velocity. The lender also received a record amount of loan applications in October.
Shellpoint was named as servicer on $7.31 billion of non-agency MBS issued during the third quarter. Cenlar, a major subservicer in the sector, is under a consent order with the OCC. (Includes data chart.)
Chase and Rocket are offering separate non-agency MBS sized at more than $1.0 billion each and stocked with jumbo mortgages. There’s also plenty of GSE-eligible loans for investment properties in the market.
The creation of a U.S. sovereign wealth fund could grease the skids for an end to the conservatorships of Fannie Mae and Freddie Mac.
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