Nierenberg, a former Bear Stearns executive, stressed that New Residential is going to be relatively conservative with its underwriting standards for non-QMs.
Jumbo and nonprime MBS production is having its best year since the financial crisis but growing pains are clear, according to experts at the Residential Mortgage Finance Symposium sponsored by the Structured Finance Industry Group in New York this week.
Originations of fix-and-flip bridge loans have increased significantly in recent years and the collateral could soon be included in MBS with credit ratings. A handful of unrated deals backed by the loans have been issued with limited notice.
Companies that specialize in whole-loan trading are looking at a somewhat brighter future thanks to increasing volumes in the expanded-credit market, but it remains to be seen whether trading desks will return to the halcyon days of the pre-crisis environment.
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