Higher interest rates took a bite out of Angel Oak Mortgage’s profits in the fourth quarter, but its non-QM originations continue to remain strong. The firm also plans to maintain regular issuance of MBS.
Six expanded-credit MBS hit the market in the past two weeks, including the largest deal since COVID upended the sector. Activity is much slower in the space for prime jumbos and GSE-eligible investment-property loans.
Aggregation of non-agency mortgages isn’t generating the types of returns seen in 2021, but it’s still a good business, according to officials at MFA Financial.
AG Mortgage Investment Trust acquired $2.5 billion of non-agency loans last year, about half of them during the fourth quarter. The REIT is targeting returns of around 15% from non-agency MBS issuance.
Goldman Sachs is set to issue its first expanded-credit MBS, with four other firms also offering deals in the past two weeks. In the prime non-agency space, JPMorgan Chase has another large offering.
Expanded-credit mortgages and business-purpose lending are set to play a bigger role in Redwood’s operations. Third-party investments also generated strong returns for the REIT in the fourth quarter.
This week, Annaly, the Change Company, Credit Suisse and Lone Star Funds all offered their second individual expanded-credit MBS of the year. Activity is also humming along in the prime non-agency market.
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