Charlie Clark, president of the American Association of Residential Mortgage Regulators, stressed the need to establish prudential standards for nonbank lenders and servicers.
It’s still not clear how the CFPB will address the patch for qualified mortgages, prompting speculation among participants in the non-QM market. The bureau has the issue listed on its December agenda.
One of the most common types of non-qualified mortgages is a loan for self-employed borrowers underwritten with bank statements. Borrowers often opt for a non-QM rather than re-file taxes.
“The appetite in the secondary market for non-QMs is insane,” said Shea Pallante, an executive vice president at the Long Island-based Sprout Mortgage...
The market for MBS with non-qualified mortgages is growing by leaps and bounds. However, there is some skepticism about whether there’s enough demand to support $50 billion in annual issuance.