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Volume 2014 - Number 11

March 21, 2014

Rating Services Requiring Higher Credit Enhancement for Non-QMs, Pushing Non-Agency MBS Issuers Toward QMs

The securitized mortgage market appears to be destined to be dominated by mortgages that meet the Consumer Financial Protection Bureau’s qualified-mortgage standards. Criteria from the rating services gives favorable treatment to QMs, while Fannie Mae and Freddie Mac are avoiding non-QMs altogether. Fitch Ratings released criteria this week for how it will rate non-agency mortgages in light of the CFPB’s ability-to-repay rule and QM standards, rounding out a number of updates from the rating services about how they will handle the issue. The ATR rule took effect for loans with an application date of Jan. 10 or later. So far, no loans subject to the ATR rule have appeared in a jumbo MBS. Issuers have...

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This weekly covers the secondary mortgage market, including mortgage-backed securities and asset-backed securities.



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After the November elections, how long will it take for a new Congress and White House to pass GSE reform legislation?

I’m confident a bill will be passed the first year.


2 to 3 years. GSE reform is complicated.


Sadly it won’t happen in a Clinton or Trump first term.


Not in my lifetime.


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