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Volume 2017 - Number 7

February 17, 2017

Replacing DFA Mortgage Rules Without Replacing Them Threatens RMBS Credit Quality, Moody’s Says

Weighing in on President Trump’s recent executive order related to the Dodd-Frank Act, analysts at Moody’s Investors Service said ditching the major mortgage regulations promulgated under the law would be negative for residential MBS unless it’s done carefully. “Any significant repeal of the Dodd-Frank Act’s mortgage-related provisions without effective alternatives would weaken residential RMBS credit quality because these provisions have strengthened the credit quality of mortgage originations, improved servicing practices and bolstered the credit integrity of RMBS structures,” the analysts said in a new report issued earlier this week. Their report then detailed...

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

 

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Poll

With rates higher this year, there has been talk of lenders liberalizing their underwriting standards in an effort to increase volume and make up for lower refis.

Do you think your shop will loosen standards over the coming three months?

Yes, but not by much.

47%

Yes, by a lot.

5%

Yes and, heck, we may even do non-QM lending.

14%

No, not at all.

26%

No and we may even tighten credit.

7%