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.
Deal volumes in the non-agency MBS market are elevated as issuers work to meet investor demand. Angel Oak, Chase and Invictus are bringing large deals and more issuance is in the pipeline.