Non-QM impairments decline; non-agency forbearance rate improves; non-agency reverse mortgage lender settles with CFPB; Redwood paying for its employees’ MI; PCMA partners with various advisors.
Prime non-agency MBS issuance continued to flow in April, helped by some new players. Expanded-credit activity has been limited recently, with a downturn in demand.
Issuance of non-agency MBS increased by 84% on a sequential basis in the first quarter of 2021. Chase accounted for nearly a third of all issuance. (Includes data chart.)
An effort by the CFPB to delay the end of the QM patch is causing uncertainty for non-agency lenders. A coalition of lenders and consumer advocates said the CFPB shouldn’t move forward with the proposal.
The impairment rate on securitized non-QMs hit 11.1% at the end of February. At the end of 2020, the rate stood at 10.3% after months of steady improvement.
AIG is set to issue a jumbo MBS with new production and MFA Financial has a non-QM deal with loans that have seasoned for 16 months. A surge of issuance also looks likely later this month.
A group of 15 lenders tracked by this publication increased production of IOs in 2020. Many of them are banks that are able to keep the loans in portfolio. (Includes data chart.)
The margins on originating non-QMs look good enough for Impac to resume production. The lender suffered a large loss in 2020, partially due to pandemic-driven volatility in the sector.
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