In the PIMCO deal, the loans have seasoned for an average of 14 months and 21.7% of borrowers are on forbearance/deferral plans.

The concept of a state-level CFPB was revived through a budget trailer bill on Aug. 4.

To meet the qualifications for a seasoned QM, a loan must be held by the creditor for at least 36 months after origination and have no more than two 30-day delinquencies during that time period...

Pulling the strings behind the non-QM curtain: A giant named PIMCO...

“Many banks and nonbanks have pulled back on the aggressive lending terms and conditions they offered in the prior 12 to 18 months,” said one financial services executive...

S&P and dv01 cited concerns about how mortgage servicers and trustees are handling the reporting of non-QMs in terms of delinquency and forbearance...

Altisource added: “We anticipate this short- to medium-term pressure on our default related businesses to continue with governmental forbearance programs and moratoriums temporarily preventing servicers from pursuing foreclosure of delinquent loans..."

In 2Q20, Fannie and Freddie acquired $104.07 billion of loans with DTI ratios greater than 43%, up 40.9% from the previous quarter.

A big problem: For one non-QM MBS, dv01 identified 233 loans that are actively modified while the trustee reported only 41 and the master servicer reported 74.

The deal received preliminary AAA ratings from Moody’s Investors Service and S&P Global Ratings, with credit enhancement of 13.75% on the senior tranche.