While lenders like the CFPB’s proposal to provide QM status to certain non-QMs if the loans perform well for the first three years after origination, con-sumer advocates warned of reduced protections for borrowers.
State regulators propose capital requirements for nonbank servicers; non-agency forbearance increases; Verus launches jumbo program; Angel Oak al-lows 90% LTV ratios on bank statement loans; PCMA expands into Florida; Home Diversification Corp. looking to launch second lien.
The CFPB’s proposal could drastically reduce the number of non-QMs originated while helping the non-agency market compete with the GSEs. Industry groups and consumer advocates endorse the tradeoff.
Wells Fargo is set to issue its first expanded-credit MBS. Loans in the deal have seasoned for an average of 15 months and other issuers are prepping MBS with somewhat seasoned mortgages.
Expanded-credit lending declined in the second quarter as many prominent nonbanks paused production. However, lending by depositories helped prop up volume, led by Citi with its menu of interest-only mortgages. (Includes data chart.)
The impairment rate on non-QM MBS declined to 19.3% in July from 20.4% in June. While loan performance is improving, MBS investors could suffer reduced cash flows and losses as modifications end.
The majority of loans in Goldman's MBS were included in deals issued in 2017 and 2018 that were subsequently collapsed. Angel Oak, Chase and MFA also issued MBS within the past two weeks.
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