The CFPB proposed extending the GSE “patch” through September 2022 while new leadership at the regulator considers revisions to the general QM standards.

More non-agency originations, lower market share of non-QMs and securitization of riskier loans are likely consequences of the CFPB’s new QM standards.

Sterling Bank has offered to buy back all non-QMs after uncovering various problems with its lending program. Between May and July, the bank repurchased loans from five MBS, taking a loss.

Some industry groups are concerned that the CFPB’s proposal to revise general QM standards contains unclear underwriting standards and legal uncertainties. They support the development of self-governance standards for the non-agency market.

Federal regulators have delayed their review of risk-retention requirements until next year. Also, most regulatory actions planned for MBS and ABS fall into the “long-term” category.

Under the CFPB proposal, which aims to establish a level playing field between the GSEs and the non-agency market, most loans will still be QMs, but there might be fewer incentives to sell the loans to the GSEs.

An advisory panel has called for greater transparency around credit ratings. SEC officials say the reforms could be difficult to implement.

The industry wants the SEC to align disclosure norms for publicly registered non-agency MBS with those followed in private placements.

Semper Capital has agreed to pay $375,000 to settle charges that it inflated the value of certain investments in its non-agency MBS fund.

A longer statute of limitation and increased disclosure requirements could help attract long-term investors in the MBS and ABS market, industry experts recommend.