Volatility in the secondary market for non-QMs receded within two months but originations are still nowhere near pre-pandemic levels. Reason: lenders focusing on agency refis.
Production records were shattered despite the crushing economic weight of the coronavirus and because of the ensuing nosedive in mortgage interest rates – and the Fed's bottomless appetite for agency securities...
The new PSPA will allow Freddie Mac and Fannie Mae to continue retaining earnings until they reach the regulatory minimum capital — almost $283 billion combined.
Fannie and Freddie will no longer purchase loans that go into forbearance before delivery. They have, however, begun charging a 50-bps adverse market fee for essentially all refis.
The new standards for qualified mortgages will provide lenders more underwriting options. But how much change that will bring in product market share remains to be seen.
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