The Financial Stability Oversight Council’s review of the secondary mortgage market focused solely on the GSEs. Bottom line: Regulators endorsed con-servative capital requirements recently unveiled by the FHFA.

More than $40 billion of jumbos originated in 2019 were non-QMs because they had DTI ratios greater than 43%. Many of the loans would be QMs if they were originated under the CFPB’s proposed QM standards. (Includes data chart.)

Some 19.2% of non-QMs in MBS were modified or delinquent as of the end of August, down 70 basis points from July. Loan performance improved even as enhanced unemployment benefits expired.

In late September, JPMorgan Chase brought two prime non-agency MBS to the market while Credit Suisse offered a non-QM deal.

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.

Carrington joins a number of other nonbanks to restart non-agency mortgage production. However, some lenders remain on the sidelines.

While some issuers will remove loans with exposure to hurricanes from MBS pools, others face higher loss expectations.