The CFPB should allow compensating factors to be considered in lieu of a strict 43% DTI ratio limit for determining QM status, according to two separate proposals.
Issuance of expanded-credit MBS is set for a strong start in the third quarter. Presale reports for eight deals were published in the past two weeks, including the second-largest post-crisis issuance.
The rating service will continue to take a relatively harsh view of mortgages underwritten with alternative documentation even though they have per-formed better than expected.
Varde agreed to sell non-QM lender Deephaven to Pretium, an investment manager involved in single-family rentals along with mortgage credit. Transaction details weren't disclosed.
Originations of interest-only mortgages declined in the first quarter among a group of lenders that participate in the sector. Close to 70% of the loans held by First Republic Bank, the nation's top IO lender, have IO features.
Five expanded-credit MBS deals are due at the end of the second quarter. The issuers are Ellington Financial, New Residential, Seer Capital Management and affiliates of Caliber Home and Starwood Property.
An affiliate of Angelo Gordon is set to issue its first non-QM MBS with what could be a trend-setter: many of the loans were originated by a CDFI. Such loans are exempt from the ATR and risk-retention standards.
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