Among the changes, the two GSEs will no longer require that a lender automatically repurchase a residential loan when a mortgage insurance company rescinds coverage.

Non-QM mortgages will exist throughout the credit spectrum, according to Mitch Hochberg, a partner at Fenway Summer and general counsel at Ethos Lending, a start-up wholesale mortgage originator.

It’s now believed that the legislation will clear the committee, but Majority Leader Harry Reid will not allow it to move any further because of weak support overall.

The sphere of mortgage lending that will exist outside the parameters of the qualified-mortgage standard established by the Consumer Financial Protection Bureau represents an attractive opportunity for both lenders and bond buyers, but skittish investors need to be won back before they return and participate to any significant degree. That was one of the key take-aways from a webinar sponsored this week by Inside Mortgage Finance, an affiliated publication. Non-QM mortgages will exist...

Over the past 10 days, MBS prices have risen by roughly 50 basis points. Since early April, prices have jumped 150 basis points, based on the Fannie Mae 4s, catching market participants off guard. Joe Farr, director of sales for MBSQuoteline, noted, “The expectation was that everyone thought bond prices would fall.” But it hasn’t turned out that way, even with the Federal Reserve continuing to taper its investment in MBS. The problem in the MBS market continues...

A New York federal judge has given preliminary approval to a $280 million settlement proposed by JPMorgan Chase to investors who claimed they were misled into buying $36.8 billion of non-agency MBS, ending a long-running, consolidated class-action suit. U.S. District Judge Pamela K. Chen granted initial approval late last week to the settlement with investors led by the Public Employees’ Retirement System of Mississippi. The Mississippi pension plan sued...

There are some potential problems with the evolving peer-to-peer lending sector that need to be resolved before ratings can be assigned to the securitization of such assets, according to Standard & Poor’s Ratings Services. To start to get a handle on this emerging sector, it is important to understand P2P companies’ specific strategies and their target demographic of borrowers and investors. “Platform operators in the P2P lending sector are...

One REIT manager suggested that in time FHFA Director Mel Watt may move to eliminate the captive insurer/FHLB “loophole”…

While originating loans that do not meet qualified-mortgage standards does pose litigation risk, many of the lenders willing to offer the loans to prime borrowers have established underwriting standards that minimize the risks while participating in a sector with less competition than the agency market. Mitch Hochberg, general counsel at Ethos Lending and a partner at Fenway Summer, estimated that non-QMs would account for at least 12.5 percent of originations in 2014, assuming a ...

The Consumer Financial Protection Bureau is considering allowing lenders that accidentally trip the debt-to-income ratio threshold for qualified mortgages to cure the mistake and maintain QM status for the loan. The 43 percent DTI ratio standard for QMs currently only applies to non-agency mortgages that aren’t eligible for sale to the government-sponsored enterprises. The limited right to cure DTI mistakes was proposed last week in conjunction with a proposal from the agency to ...