Wells Fargo, which exited the correspondent channel for jumbo mortgages in April, is still not sure if or when it will resume originating the product through the platform.
Originations of expanded-credit mortgages are up in 2020 despite a pullback by nonbanks that dominated the top-10 lender ranking in 2019. The increase this year was led by banks.
The CFPB’s proposal to replace the 43% DTI ratio limit for determining QMs with a price-based approach has received support from industry participants.
One of the challenges with borrowers getting forbearance in this category is a lack of clarity regarding which entity holds legal authority to decide terms of loss mitigation.
Strong demand for jumbo mortgages helped support origination volume in the second quarter even as many banks tightened underwriting standards for the loans.
Non-agency mortgages aren’t covered under the CARES Act, leaving servicers of such loans to rely on a combination of standards set by the GSEs and individual MBS contracts.
Underwriting standards on jumbo mortgages tightened in March and April amid volatility from the coronavirus. The spread on interest rates for jumbo mortgages is also wider than it was before March.
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