JPMorgan Chase Bank has created a synthetic credit-linked note to transfer credit risk on a pool of jumbo mortgages. Unlike traditional MBS, loans in the transaction will remain on the bank’s balance sheet.
Issuance of non-agency MBS slowed near the end of the third quarter but presale reports for a number of deals have been published this month and more securities are on the way.
Originations of reverse mortgages are dominated by FHA loans. However, there’s a loan limit on FHA loans, allowing Reverse Mortgage Funding and other lenders to develop a market for proprietary products.
There’s no consensus among industry participants on how the CFPB should address the “patch” for qualified mortgages. However, lenders generally agree that Appendix Q of the ATR rule needs a major overhaul.
The debate around the qualified mortgage “patch” has shifted to whether the non-agency market can handle the volume that currently is delivered to the GSEs.
Non-QM MBS from affiliates of Angelo Gordon and Caliber Home Loans are in the works along with a deal backed by investment-property mortgages from JPMorgan Chase.
The Treasury report on housing-finance reform included a number of suggestions on how federal regulators could promote a level playing field between the GSEs and non-agency players.
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