Mortgage firms are concerned they may be sanctioned or penalized if they make a mistake, but the FHA at this time likely will not take any action because the system is so new.

“If the cap is 2.75 percent, it doesn’t leave much, but you have to keep in mind that the lender is building ‘everything else’ into the note rate,” said Marc Savitt.

Several other nonbanks have entered the non-QM space the past few months including Bayview through its Lakeview unit, Impac and others.

The holding company for the nation’s sixth largest lender recently sold its fleet division, and is in the throes of restructuring its mortgage unit, which is now its main line of business.

Here’s a question to ponder: what does Jamie Dimon like less? Loan brokers or the FHA?

Surprise: most of the growth by nonbanks has been by smaller mortgage bankers.

One California-based mortgage broker had this to say: “All the CFPBs is doing is driving up costs, further confusing the consumer, and wasting even more tax payer dollars.”

Citigroup also marked down the asset value of its residential mortgage servicing portfolio to $2.282 billion, a 12 percent decline on a sequential basis.

Under the terms of the settlement, Citigroup will pay $4.5 billion in cash and provide $2.5 billion in consumer relief.

The moves are part of a comprehensive plan presented by Thomas O’Brien, Sun Bancorp’s new president and CEO who was brought on board as a consultant in April to restructure the company.