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.
The CFPB wants to base QM status on a pricing metric rather than approval by the GSEs. Most mortgages would remain QMs but some business could shift to the non-agency market.
Pandemic-related market volatility in March dampened non-agency jumbo lending more than other sectors in the mortgage business. Conforming-jumbo production also fell sharply in the first quarter but began regaining momentum in April. (Includes three data charts.)
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