State regulators propose capital requirements for nonbank servicers; non-agency forbearance increases; Verus launches jumbo program; Angel Oak al-lows 90% LTV ratios on bank statement loans; PCMA expands into Florida; Home Diversification Corp. looking to launch second lien.

The CFPB’s proposal could drastically reduce the number of non-QMs originated while helping the non-agency market compete with the GSEs. Industry groups and consumer advocates endorse the tradeoff.

Industry groups warn that most ARMs that reset within five years of origination won’t qualify for safe-harbor status under the CFPB’s qualified-mortgage proposal.

Wells Fargo is set to issue its first expanded-credit MBS. Loans in the deal have seasoned for an average of 15 months and other issuers are prepping MBS with somewhat seasoned mortgages.

Although three big banks reduced their first-lien portfolios during the second quarter, total holdings by banks and thrifts increased. (Includes data chart.)

Carrington joins a number of other nonbanks to restart non-agency mortgage production. However, some lenders remain on the sidelines.

IO lending among a group of 15 prominent lenders increased by 35.3% in the second quarter. Banks accounted for nearly all of the increase. (Includes data chart.)

While some issuers will remove loans with exposure to hurricanes from MBS pools, others face higher loss expectations.

Forbearance levels steady; Verus launches commercial lending unit; Angel Oak expanding retail branches.