Non-QM fills the gap in lost volume

Back in December, HousingWire Senior Mortgage Reporter Bill Conroy took a close look at how current market conditions may impact non-QM lending in 2022 and beyond.

Good afternoon! Was this newsletter forwarded to you? Sign up here. LendingLife Crew!  Every now and then I nudge my way into HW's newsletter workflow. Thanks for welcoming me back into your inbox! Today, as we do from time to time, we are focusing on the non-QM market.    Back in December, HousingWire Senior Mortgage Reporter Bill Conroy took a close look at how current market conditions may impact non-QM lending in 2022 and beyond. A culmination of declining refi volume, originator focus on purchase and a wave of self-employed and gig-economy homebuyers is setting the stage for non-QM volume to make a massive jump in 2022 and future years.    Mike Fierman, Managing Partner and Co-CEO of Angel Oak Capital sees a path to non-QM originations expanding to $80 billion and $100 billion.    Dane Smith, president of Verus Mortgage Capital, takes a more conservative view.    "In 2022, we forecast issuance to grow to over $40 billion," he said.   Considering that total private-label securitization was approximately $25 billion in 2021, Fiernan and Smith anticipate a 2022 market where total non-agency volume expands by 2-4x.    Looking beyond 2022, Manish Valecha, head of client solutions at Angel Oak, sees a future where the non-QM market "as a percentage of the overall market is about 10% to 12% in a normalized environment…That implies a market size [today] somewhere between $175 billion to maybe $200 billion."     And while market conditions point toward huge origination potential in non-QM, investor interest in the private-label securities will ultimately drive market size. Good news, these securities are performing. A report released by dv01 this week reported that overall impairments in the non-QM benchmark decreased 28 bps MoM and are now at 7.23%.    Non-QM lenders are preparing for this growth opportunity – In January, Angel Oak Mortgage, Acra Lending and Newfi had at least 130 openings on job listings sites. These lenders are also working to meet borrower and market needs with new products, including investor cash flow / DSCR products to support income property investors and borrowers seeking to complete 1031 exchanges.    Until next time, Clayton Collins CEO // HW Media

P.S. Make sure to check out this season of the Housing News podcast. I'm the host of the show and have already had the pleasure of interviewing Dave Stevens, Erin Sykes, Moses Kagan, Zak Schwarzman and Nick Thomas. New episodes with Chris Heller and Greg Schwartz drop in the coming week!

Are refinance and agency volumes truly threatened in 2022?

Presented by Angel Oak

As a growing number of borrowers no longer qualify for home loans, non-QM loans can help fill the gap in lost volume from a shrinking Agency market and declining refinance business.

Refi applications fall to 53% of mix amid rate spike

Mortgage

Compared to the same week one year ago, mortgage apps overall dropped 39.8%, with a sharp decline in refi (-54.1%) compared to purchase (-6.8%).

Flowers & chocolates are out. Express your commitment with an eVault. Looking for a way to tell your borrowers you're serious about a digital future with them? The IDS eVault in Solitude Solution is integrated with the MERS eRegistry, giving lenders expanded digital mortgage capabilities. Let's get serious!

Sponsored by IDS, Inc.

Why lenders should think about non-QM now, not later

Presented by Angel Oak

Agency rates are on the rise and refinance volume is down. Originators who had their best year in 2021 will have to utilize something else to make up for this loss in 2022 and non-QM can be the answer.

Total 2021 reverse mortgage refinance, purchase volume revealed in new data

Data

Reverse mortgage refinances didn't quite hit half of all volume in 2021, but they came very close. Meanwhile, total H4P share dropped further.

Will rising interest rates impact VA loans for first-time homebuyers?

Real Estate, Mortgage

VA loans for first-time homebuyers are impacted by interest rates, but still an excellent business opportunity in 2022.

ICYMI: Move over Fannie, the non-QM loan is in the fast lane

Mortgage, HW+ Exclusive Content

The non-QM private-label market could swell to $40 billion in 2022, and even that is just a fraction of the market's loan-origination potential.

HousingWire, 433 East Las Colinas Blvd., Suite 830, Irving, TX 75039 Manage preferences

Share this

Share on FacebookPlus on Google+