FHFA Director Mark Calabria said any revised qualified mortgage rule introduced by the CFPB should be applicable to all lenders. Industry participants are unsure how the regulator will address the issue.
The majority of expanded-credit MBS this year has been filled with Alt A loans that tend to have higher credit scores and are underwritten with alternative documentation.
Issuers of expanded-credit MBS have significantly increased deal volume this year without reducing underwriting standards in terms of traditional credit characteristics. Average credit scores for loans in the transactions have actually improved this year.
Production of jumbo mortgages at First Republic Bank and Flagstar Bank increased on a sequential basis in the third quarter. Volume was driven by refinances as interest rates fell during the quarter.
JPMorgan Chase Bank issued a deal this month that looks like it will meet requirements for favorable capital treatment by the OCC. The transactions could prompt similar issuance by other banks.
A proposal by the FDIC to decrease disclosure requirements for certain non-agency MBS issued by banks largely found support from industry participants. However, MBS investors and consumer advocates raised concerns.