The CFPB is considering eliminating the DTI ratio metric when determining the QM status of a mortgage and instead basing the designation on the interest rate. The proposal was met with mixed reactions.

Invictus is set to issue its largest expanded-credit MBS yet. Angel Oak and Caliber also have deals in the market.

Velocity completes IPO; losses on Angel Oak’s MBS temporary; Radian sells Clayton; Provident Bank acquires non-agency warehouse lender; GSF Mortgage launches jumbo product; Customers Bank takes a loss.

At least eight expanded-credit MBS rated by DBRS Morningstar suffered losses in the second half of 2019. Investors, though, were protected due to high credit enhancement levels.

After a lull in December, issuers are bringing non-agency MBS to the market. Redwood Trust is planning a deal with seasoned mortgages while New Residential has an expanded-credit MBS.

LendSure launches bridge loan product; Sprout hires Ron Krueger as senior vice president; DBRS Morningstar outlines rating criteria for reverse mortgages; Fitch upgrades its servicer ratings of BSI Financial Services.

Expanded-credit MBS issuance looks likely to increase again in 2020, but not at the exponential growth rate seen since the sector emerged in 2015. A major variable is how the CFPB will address the QM patch.

The bank has suspended a non-QM loan program due to issues with policies and practices. The program accounted for the bulk of the firm’s originations.

IO lending increased in the third quarter, with First Republic leading the pack. The bank held nearly $30 billion of IOs in portfolio as of September-end. (Includes data chart.)