Sterling Bank and Trust reached a settlement over faulty disclosures on the bank’s now shuttered non-QM program. The bank has upped reserves for further potential losses stemming from repurchases and loan sales.
Shellpoint processed more than 25% of the dollar volume of non-agency MBS issued in 2020. Servicers continue to grapple with elevated delinquencies, forbearance and concerns about disclosures. (Includes data chart.)
Non-agency forbearance declines; Pacific Western Bank acquires Civic Financial Services; Velocity inks new financing; Angel Oak Commercial Lending set for growth.
The non-QM market is poised for a comeback, helped by strong demand from investors in the secondary market. However, production is lagging as lenders continue to focus on agency refis.
First Republic Bank reported increased production in the fourth quarter and for full year. Volume was down on an annual basis at Flagstar Bank and Redwood Trust.
It’s taking longer to originate non-qualified mortgages and offload the product due to capacity constraints at due diligence providers and other third-party vendors.
A significant portion of non-QMs could meet new standards for qualified mortgages, according to Kroll Bond Rating Agency. It’s also possible that the CFPB will alter the standards before they take effect.
Chase is set to issue a $1.03 billion MBS backed by newly originated jumbos. Meanwhile, Credit Suisse and MFA have deals with slightly seasoned non-QMs and investment-property loans.
The latest changes made to the GSEs’ preferred stock purchase agreement place limits on certain loan acquisitions by Fannie and Freddie. However, the move is unlikely to help the non-agency market.
The creation of a U.S. sovereign wealth fund could grease the skids for an end to the conservatorships of Fannie Mae and Freddie Mac.
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