The enhanced guidelines include qualifying mortgages originated through affordable lending programs, loans for manufactured homes, home improvement and renovation financing, and lender-funded affordable housing assistance programs.
“Longer-term rates, including mortgage rates, had already baked in the expectation of hikes at this and future meetings,” said Mike Fratantoni, a senior vice president and chief economist at the Mortgage Bankers Association.
Non-agency market participants have concerns about lender’s choice, but also expect modern credit scoring models to improve visibility into borrower credit behavior.
The yield on the 10-year has increased from 4.8% at the beginning of the Trump administration to above 5.0% this week, even with recent efforts by the Treasury aimed at lowering the yield, such as bond buybacks.
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