With forbearance rates stagnant since November and payment holidays scheduled to end in the coming months, foreclosures are expected. Still, loss mitigation and home price appreciation could dull the impact.
JPMorgan Chase is set to issue a credit-risk transfer transaction involving non-QMs and Ellington Financial is the first issuer with a non-QM MBS predominantly stocked with loans originated after March 2020.
Eddy Perez, president of Equity Prime Mortgage in Atlanta reports yes, applications are slowing but he’s hardly worried “because we’ve been working on outsourcing and analyzing all our data for the eventual slowdown that will create a margin crunch.”
loanDepot’s IPO fizzled last week. This week, the nonbank’s stock price was up sharply even before the company reported $547.2 million in net income for the fourth quarter.
Some non-QM lenders weathered market volatility in March 2020 without halting production while others took a few months off. Now, two of the top players in the sector are ready to increase production.
Moody's: “This deal is unique in that the source of payments for the notes will be JPMorgan Chase Bank’s own funds, and not the collections on the loans or note proceeds held in a segregated trust account."
In mid-January, Charles Scharf, president and CEO of Wells, had indicated the bank was ready to resume activity on correspondent basis, but was noncomittal.