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.
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.
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