Performance of non-QM loans has been strong, buoyed by good house-price appreciation and the fact there have been no lawsuits based on the ability-to-repay rule.
Deutsche noted that after years of a steady broad-based housing market recovery “investors are now facing severe shortages in distressed housing pipelines.”
The plan to raise the standard has been met with hostility by many in the residential real estate industry, said Matthew Pointon, an economist at Capital Economics.