Rep. French Hill, R-AR, wants the QM patch to expire as well. “Allowing Fannie and Freddie to continue loading up on high-debt mortgages because of a temporary loophole has had a harmful effect on the broader housing market,” he said.
Fannie/Freddie "noncore" loans include conforming jumbos, mortgages with debt-to-income ratios greater than 43%, investor loans/second properties and cash-out refinances...
The proposal to end the qualified mortgage patch available to loans eligible for sale to the GSEs could boost non-agency mortgage activity, though the devil is in the details as the plan plays out leading to early 2021.
Participants in the non-agency market are looking forward to expiration of the QM patch. However, industry groups and consumer advocates want the patch to be kept intact.
More than half of the dollar volume of mortgages securitized by the GSEs in 2018 was backed by noncore loans, according to a new analysis by Inside Nonconforming Markets.
Banks are increasingly using asset dissipation underwriting tactics that aren’t supported by prudent risk management practices, according to the OCC. The regulator issued a bulletin with some suggestions for banks.
Angel Oak is set to issue one of its largest expanded-credit MBS. The deal follows strong issuance in the market in July and a number of other MBS from other firms are in the works.
Citadel posted record origination volume for the company in the second quarter, with help from products beyond the typical non-qualified mortgage offerings. Citadel also stands out by servicing its originations and largely avoiding contributing to non-agency MBS.