In a sign of hope for the non-QM market, Sprout Mortgage resumed offering expanded-credit products last week.

Warehouse credit flows downhill: from the financier to the nonbank lender to the consumer. But with the pandemic stoking new economic fears, some providers are tightening their standards, like market leaders JPM and FH.

According to independent mortgage bankers, aggregators are adding credit overlays and refusing to buy loans in response to post-closing forbearance risk.

Wells Fargo has temporarily halted jumbo production through correspondent sellers while Chase, the other major player, is still active.

Amid the chaos in the financial market, originations of jumbo mortgages at big banks continue while non-QM lenders are laying off staff.

As the economic crisis precipitated by the coronavirus heats up, residential lenders have tightened their underwriting guidelines.

The mortgage market remained unsettled as the coronavirus damaged the U.S. economy and lenders weighed their options. The Fed came to the rescue with liquidity measures but fears regarding nonbanks persist.

The bulk of lenders operating in the non-QM market have suspended production due to a lack of demand in the secondary market. There are some signs that originations could resume within weeks.

Some non-QM lenders are facing pricing issues as demand in the secondary market fluctuates. At least one wholesale lender has suspended originations.

The creation of the qualified-mortgage patch was “unfair” but necessary to prop up originations, according to former CFPB officials who were involved in crafting the temporary rule.