The new standards for qualified mortgages will provide lenders more underwriting options. But how much change that will bring in product market share remains to be seen.
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.