Morningstar argues it can use undisclosed loan-specific stress adjustments for subjective reasons, including to bring the rating for a commercial MBS in line with expectations based on similar deals.
Industry participants suggest that technology and communication can help the closing process run smoothly. Hybrid closings have cut the time a borrower spends with a notary from 45 minutes to 15 minutes.
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.