There’s no consensus among industry participants on how the CFPB should address the “patch” for qualified mortgages. However, lenders generally agree that Appendix Q of the ATR rule needs a major overhaul.
The debate around the qualified mortgage “patch” has shifted to whether the non-agency market can handle the volume that currently is delivered to the GSEs.
Non-QM MBS from affiliates of Angelo Gordon and Caliber Home Loans are in the works along with a deal backed by investment-property mortgages from JPMorgan Chase.
In comments on ways to address the end of the qualified mortgage patch, the Treasury suggested using a bright-line test while Redwood cautioned against using a metric based on the interest rate of a mortgage.
Servicing portfolios at most of the major subprime servicers are shrinking, except at Citadel Servicing. The firm has more than doubled its servicing portfolio in the past year.
Activity in the non-agency MBS market is resuming after a slowdown in the second half of August. Presale reports for five deals have been published this month, led by prime non-agency MBS.
Production of expanded-credit mortgages increased in the second quarter but not by nearly as much as the surge in total originations. The sector was crowded out to some extent by conventional loan refinances.
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