A borrower’s liquidity situation seems to be a better indicator of potential default than LTV or DTI ratios, according to the JPMorgan Chase Institute. The institute suggests that the use of emergency mortgage reserve accounts could help alter the DTI ratio standards for qualified mortgages.

Originations are strong in many markets but hiring by mortgage banking firms is not particularly robust. Meanwhile, some executives wonder privately whether the rate rally is getting long in the tooth.

Mortgage brokers accounted for a record 14.8% of single-family business in the agency MBS market during the second quarter. Credit trends suggest sellers may have focused on the low-hanging fruit as production volume ramped up significantly.