On average, about half of the borrowers with non-QMs in mortgage-backed securities are self-employed, according to S&P Global Ratings. These borrowers are more at risk to miss payments on their mortgages than salaried borrowers.
Four of the top five originators of mortgages included in prime non-agency MBS can’t retain originations in portfolio and the market isn’t expected to rebound in the coming months. (Includes two data charts.)
Following in the footsteps of Wells, a handful of correspondent aggregators have suspended originations of jumbo mortgages. Underwriting standards for the loans also have tightened.