The share of non-QMs that are delinquent or in a loan modification declined again in September. The impairment rate in the sector remains high, though loan holders are optimistic.
The Conference of State Bank Supervisors said the new proposed standards for nonbank servicers will not only align with federal guidelines but also widen the net to include servicing of non-agency mortgages.
Ocwen settles lawsuit with Florida AG; non-agency forbearance increases; non-QM MBS pipeline filling up; Angel Oak offers 40-year IO; new non-QM lender in the market.
Some 19.2% of non-QMs in MBS were modified or delinquent as of the end of August, down 70 basis points from July. Loan performance improved even as enhanced unemployment benefits expired.
If the CFPB doesn’t address the issue, sales of modified loans could stall due to compliance concerns, according to Kasasa, a third-party service provider.
The impairment rate on non-QM MBS declined to 19.3% in July from 20.4% in June. While loan performance is improving, MBS investors could suffer reduced cash flows and losses as modifications end.
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