MISMO is getting close to releasing revised standards for data collection in the non-agency MBS market. The effort could prompt efficiencies for lenders, due diligence firms and rating services.
A number of lenders have started offering conforming mortgages with balances as high as $715,000, even though the GSE loan limit is $647,200 through the end of this year. As with prior years, the lenders are anticipating higher loan limits for the GSEs next year.
Newfi is offering a non-QM where the interest rate incrementally steps up annually for five years then remains fixed. Meanwhile, Milo launched a cash-out crypto mortgage, where borrowers pledge cryptocurrency in exchange for a loan as large as $5.0 million.
Improvements to practices in the non-agency MBS market will help to protect investors from lenders that don’t make it through the current market contraction, according to Kroll Bond Rating Agency.
Securitization from Unlock and Saluda Grade with home-equity agreements; NewRez offers 40-year mortgages with interest-only option; Fitch to acquire dv01; DBRS adds Clarifii to its list of due diligence providers.
Less-capitalized non-QM lenders struggled amid weak demand for the loans in the secondary market. Some firms are looking to take advantage of that weakness.
Pricing increases that took effect in April reduced the volume of loans for second homes and conforming jumbos going to the GSEs. The “core” product share of GSE business also hit a high level in the second quarter. (Includes data chart.)
Non-QM lenders are regaining their footing as volatility in the secondary market recedes. And many potential non-QM borrowers are comfortable paying relatively high interest rates, helping to boost originations.
Impairments, which reflect delinquencies and modifications, increased on securitized non-QMs for a second consecutive month. In July, the performance of severely distressed borrowers also worsened.
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