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Volume 2016 - Number 4

January 28, 2016

A Secondary Market Develops for ‘Scratch & Dent’ TRID Loans; Even PIMCO is Eyeing the Sector

With nonbanks fearing they could be stuck with error-laden mortgages that violate the integrated disclosure rule, a secondary market has developed for this new breed of “scratch and dent” loans, according to interviews conducted by Inside Mortgage Finance. One investor, requesting his firm’s name not be identified, said his shop bought such a mortgage for 90 cents on the dollar. Participants in the market – including investors and traders – concede...

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Poll

With originations expected to drop in 2018, will your shop turn to non-QM/non-prime mortgage products as a way to bolster volumes?

Yes, definitely. We’re planning a launch.

33%

No. It’s still difficult compliance/regulatory-wise.

20%

Maybe. It’s under consideration.

33%

Not now. But things could change as 2018 progresses.

13%