CFPB Director Kathy Kraninger says the relatively small size of the non-qualified-mortgage market is one of the reasons the bureau plans to change QM standards.
Congress is unlikely to increase the g-fee charged by the GSEs, though the FHFA may as part of efforts to “level the playing field” between the GSEs and the non-agency market.
Certain non-QM lenders’ underwriting tactics might not meet the CFPB’s ability-to-repay rule, according to Moody’s. It suggested tighter standards for bank statement mortgages and loans to the self-employed.
Annaly Capital Management and Ellington Financial are both generating double-digit returns from aggregating mortgages and issuing non-agency MBS. The firms plan to increase their activity in the sector.
SEC to meet MBS issuers; HPS acquires Citadel; Anworth plans non-QM MBS; Quontic streamlines non-QM refis; Ocwen takes a loss on servicing for New Residential.
The bureau’s plan to replace the QM patch could reduce the volume of mortgages that flow into the non-agency market, according to analysts. The CFPB is working to avoid disruption to GSE-eligible originations.
First Republic Bank enjoyed a record year for originations while jumbo production declined at Flagstar Bank and Axos Financial. The banks noted that competition suppressed originations.
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