Volume 2014 - Number 41
October 31, 2014
Non-QMs in Non-Agency MBS Seen as Pricing Nearly As Strong as QMs, Depending on the Underwriting
Issuers of non-agency MBS should be able to price loans that don’t meet the standards for qualified mortgages at nearly the same levels as QMs, according to Andrew Davidson & Co., a firm that provides risk analytics on non-agency MBS. Non-QMs actually perform better than similar QMs in certain scenarios, as long as underwriting on the products is strong. Beginning in late 2015, non-QMs included in new non-agency MBS will trigger risk-retention requirements. Only mortgages that meet QM standards will be deemed to be qualified residential mortgages and exempt from risk retention. Interest-only mortgages appear...
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This weekly covers the secondary mortgage market, including mortgage-backed securities and asset-backed securities.
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